Minister McCormack said the bill will create a new veteran payment to assist financially vulnerable veterans who have lodged a compensation claim for a mental health condition and are unable to work while their claim is being determined.
The determination of qualifying service will also be automated, removing the requirement for a veteran to make an application for the determination.
"This is a key part of a broader improvement strategy to ease the transition process for veterans, putting veterans and their needs at the forefront," Minister McCormack said.
An additional $7.1 million will be invested to deliver support services for veterans and their families through increased access to childcare, home care and counselling.
Minister McCormack said partners of veterans may be eligible for the veteran payment and veterans with dependent children may be entitled to the maximum rates of Family Tax Benefit Part A without being subject to the Family Tax Benefit means test while they receive the veteran payment.
"Australian Defence Force members who served in Japan after the cessation of hostilities at the end of World War II and before the formation of the British Commonwealth Occupation Force (BCOF) will be entitled to receive a Gold Card," he said.
"Veterans and their families are at the heart of communities around Australia – they have supported us and this government is committed to ensuring they receive and have access to support services they need. Family plays an essential role in a veteran’s health and wellbeing and this bill will ensure vital services such as income support and health care help veterans and their families transitioning into civilian life."
Other measures in the bill include a new pilot program to provide improved mental health support to veterans in remote and regional areas of Australia.