Labor has dumped controversial plans for a $5,000 cap on veterans' allied health payments as part of its "solemn obligation" to ex-serving personnel.

Following sustained criticism and campaigning from advocates, Veterans' Affairs Minister Matt Keogh announced on Thursday the government had backed down on the measure.

In a bid to improve the budget's bottom line, the government introduced a $5,000 annual limit on allied health services for veterans which was originally set to come into effect from July 2027.

Read the full story at SBS News - Australia.