The federal government has a duty to provide life-long access to specialised mental health services for defence veterans who remained vulnerable for the rest of their lives, a royal commission has been told.

The former commissioner of the Productivity Commission, Robert Fitzgerald, said that of all the reforms proposed in his 2019 report, A Better Way to Support Veterans, mental health services for veterans was identified as the most "urgent priority".

"You have to ensure that there are adequate health and mental health facilities for serving personnel, which they trust and that they will use as distinct from ... nobody wants to use them because they don't trust them," Mr Fitzgerald told the Royal Commission into Defence and Veteran Suicide.

The report found the toll on a veteran's mental health often "peaked" 12 to 18 months after they left the service, especially if it was an involuntary discharge due to mental or physical injuries.

Mr Fitzgerald said another key recommendation of the report was to establish a Joint Transition Authority to ensure veterans had the support they needed on their return to civilian life, which could be a highly traumatic experience.

"This is a system which reconstructs people going into the defence system," Mr Fitzgerald said.

"We don't put anywhere near the amount of energy and effort to in fact acclimatise people for the role of a civilian again.

"Report after report has identified that the greatest weakness in the division between defence and the Department of Veteran Affairs has arisen in relation to transition."

Productivity Commission commissioner Richard Spencer, who co-authored the report with Mr Fitzgerald, told the commission young veterans were especially at risk given they typically joined the defence service at 18, and when they were discharged they were still in their 20s.

"They come out come out as at a vulnerable time," Mr Spencer said.

"They don't know how to be a civilian. They don't know what a Medicare card is. They've been in an environment where things are done for them.

"Duty, following orders is paramount and all of a sudden they are adrift."

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