The department introduced its online claims portal, MyService, in late 2017 and has been gradually expanding the types of claims which can be lodged through it.

It has meant veterans can answer as few as three questions to submit a claim, compared to 40 questions on some paper forms.

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It has also allowed claims for eight conditions can be accepted immediately, and enabled processing for 32 other conditions to be fast-tracked. But it hasn't all been smooth sailing.

Brian Briggs, who is a military compensation expert with Slater and Gordon said the department appeared to be "overloaded" with claims coming in through MyService.

"It's the worst I've seen in it in the last three months, out of the last 11 years," Mr Briggs said.

"Just to allocate a file to a delegate is taking 75 days."

Mr Briggs said there seemed to be more claims getting knocked back due to insufficient information, although a department spokesperson disputed this.

"In 2018-19, the overall acceptance rate of determinations by the Department has increased compared to the previous two years," the spokesperson said.

"There is no evidence of more determinations being refused. In any case the department will seek further information from the veteran should incorrect paperwork be submitted."

Mick Quinn of the Australian Peacekeepers and Peacemakers Veterans' Association said there had an actually been an improvement at the level of claims he dealt with, although the administration tail of the claim could still take around two years.

But he said he's reverted back to using the paper-based system after MyService kept crashing.

"I ceased using it, I haven't gone back to it yet. The last time I went to use it was three weeks ago, I went through a two-hour interview and one hour of paperwork only for it to crash at the end," Mr Quinn said.

Department of Veterans' Affairs secretary Liz Cosson admitted they were "catching up" on claims, after a surge from the online system.

"I think we weren't expecting the great take up we had, I'll be honest with you there and so what we're doing now is ramping up," Ms Cosson said.

"What we're doing is we're triaging - we're looking at those veterans that have had their liability accepted to say yes that condition or illness is related to your service, if you're now wanting to seek permanent impairment, that number is increasing, and we're triaging to say if you've got a mental health condition, if you've got a drug or alcohol dependency or you've got financial challenges, we'll bring you to the front, let us know, that would always be my message."

Ms Cosson also said there had been a spike in permanent impairment claims, which also contributed to the backlog.

She said they were bringing in extra staff to help deal with the numbers, but had been hit by the efficiency dividend like other parts of the public service. She suggested a change in funding model could help.

"We did have a couple of years where they kept us at a steady state with our staffing going through the transformation," Ms Cosson said.

"We do have a blended workforce ... where we've got APS, we've got contractors, we've got labour hire and we need to use that to be able to meet demand because we are a demand-driven model for our veterans funding through our administered fund and we need to be the same for our department as well."