The Government is boosting funding for war pensions and support services for veterans by $60 million during the next five years.
Prime Minister John Key made the announcement in a speech to the Returned and Services Association in Wellington on Monday evening.
The package includes a new weekly income compensation for veterans under the age of retirement and unable to work.
It also includes lifting the War Disablement and Surviving Spouse Pension rates by 5% from April 2013 and increasing the eligibility for support services for veterans such as home help and lawn mowing.
Mr Key says legislation enacting the changes will be introduced to Parliament early next year.
"These are very brave New Zealanders, they've put their lives on the line in defence of our country. Given the commitments we made, we've done everything we can within the financial constraints we faced to try and honour their commitment."