Maj. Mark Campbell, in the wheelchair, was struck by an improvised explosive device in Afghanistan in 2008. He was on Parliament Hill for Sunday's announcement. (CBC)

The federal government has announced additional funding to expand allowances for wounded soldiers, boosting monthly payments to the most severely injured.

Defence Minister Peter MacKay and Veterans Affairs Minister Jean-Pierre Blackburn on Sunday unveiled the five-year initiative to revise two exisiting programs.

"Over the next five years alone, an additional $200 million will be paid directly to the most serious veterans and those with the lowest incomes," MacKay told a news conference in Ottawa.

Those with the most serious or catastrophic injuries, such as lost limbs, will receive an additional $1,000 each month for the rest of their lives if they are unable to work because of their disabilities.

The new measures are expected to benefit about 4,000 veterans.

"This is money that will go directly into the pockets of the households of veterans. This money is in addition to 75 per cent of your salary and your monthly allowance of between $536 and $1,609," he said.

"In the next five years, we expect over 2,300 veterans to find themselves in rehabilitation, being paid 75 per cent of their salary and struggling with bills. And so when this legislation passes, veterans who find themselves in this difficult situation will be provided a minimum of $45,000," MacKay added.

The government estimates the changes will cost $2 billion over the next 25 to 30 years.

When the Conservatives' new Veterans Charter came into effect in 2006, some veterans' groups complained that lump-sum payments had replaced monthly disability pensions.

The additional monthly payments won't be taxable, but they also won't be retroactive to 2006.

The ministers say the changes will be implemented as soon as they pass through the House of Commons. Parliamentarians return from their summer recess on Monday.