Jim Hislop, of Wodonga, and Rutherglen's Herb Ellerbock believe former personnel have been denied their full benefits because of a flawed indexation method and excessive repayments of lump sums taken, or commuted, when they retired.

"It's big numbers," Mr Ellerbock said.

"I've done some costings on it and probably over the life of the scheme we're talking $23 billion not paid that we think should have been paid.

"We don't want to get back pay, we're not after retrospective payments of what we've lost to the state.

"But we want the rate of our benefits to be lifted to where they would be had they been fully indexed.

"With the commutation, of course we want that repayment to cease once we've paid it off."

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Mr Hislop, a retired lieutenant colonel, estimated he had paid an additional $50,000 in the past nine years, but had no interest in pursuing any claim.

"Personally I think of the private soldier who hasn't got a very big superannuation," he said.

"A private soldier who did 20 years or a corporal who did 20 years, he's getting peanuts, he's being ripped off.

"There's people around town here now that are really struggling, ex-servicemen and women."

The two former soldiers have spent years trying to lobby successive Defence Personnel Ministers to amend legislation related to the Defence Force Retirement and Death Benefits scheme.

This came into effect in October 1972 and closed to new members in September 1991, with the pair suggesting existing beneficiaries would live until about 2060.

But their arguments, and those of like-minded peers, continue to be rejected, with current minister Darren Chester telling a petitioner last month the government did not support the proposed legislative changes.

"Whilst I acknowledge the issues raised in the petition cause considerable concern amongst some in the ex-service community, the government does not support the view that pension recipients have been denied eligible benefits," Mr Chester wrote.

Mr Hislop, 81, and Mr Ellerbock, 72, joined the army as 16 year-old apprentices and stayed for 33 and 20 years respectively, both also serving in Vietnam.

The pair valued their rewarding defence careers but superannuation details had not been high in their thoughts.

"We looked at the brochures and thought, 'Oh yeah, this looks like a good thing'," Mr Ellerbock said.

"We didn't have a choice about whether we were in the scheme or not."

He left the army in 1983, aged 36, as a warrant officer class one while Mr Hislop ended his military career in 1987.

Retiring personnel had the option of commutation, where they received a lump sum prepayment of part of their future retirement benefit, money that could help them, for example, buy a house in civilian life.

Many chose to do this, understanding their benefit would be reduced as a result but believing this was part of a repayment plan.

"It didn't say anywhere that it would be for life," Mr Ellerbock said.

He said the formula had been calculated based on life expectancy from the 1960s, about 72 years, but people generally now lived much longer.

"But when we get to that life expectancy, which I got to last year and Jim got to nine years ago, those repayments don't stop, they just keep going," he said.

"That's 1200 bucks a year that I have to pay for the rest of my life, even though I've already paid that debt back."

In 2017, then-Defence Personnel Minister Dan Tehan told Mr Hislop in a letter the lump sum was "neither an advance nor a loan".

"It is a common misunderstanding that those members who choose to commute will have their retirement pay restored to the full amount once they exceed the life expectancy defined in the scheme," Mr Tehan said.

"The life expectancy factor is only an element of the calculation undertaken to determine a member's lump sum and resultant pension benefit, nothing more."

A 1986 Defence personnel information handbook, which Mr Hislop showed The Border Mail, discussed the right to commute.

"This means that you are able to borrow an amount equal to several times your retired pay at the time of your discharge and repay that amount over your normal life expectancy," it stated.

"This is achieved by paying you a lump sum and a reduced amount of retired pay thereafter."

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As part of their campaign, Mr Ellerbock and Mr Hislop formed the Australian Defence Force Retirees Association to act for members and represent their military superannuation grievances.

"We're putting together a case to put to the Commonwealth Ombudsman," Mr Ellerbock said.

"We know the ombudsman doesn't have the authority or the power to change the legislation but we want the ombudsman to make a finding as to the fairness and the appropriateness of this particular legislation.

If the minister and the government don't want to move on this, then we will start to look at our legal options."

Mr Chester did not respond directly to all questions from The Border Mail on Friday, but noted the federal government in 2014 introduced fair indexation for DFRDB and its 1948 predecessor Defence Force Retirement Benefits.

"This change is estimated to provide over $4 billion in additional pension benefits to military superannuants and their families," he said.

Last month Mr Chester said petitioners' concerns they weren't informed of the permanent benefit reduction resulting from commutation "is not supported by forms and fact sheets Commonwealth Superannuation Corporation has identified from its records over previous decades going back to the 1970s".

CSC chief executive Peter Carrigy-Ryan appeared before a senate estimates hearing on February 19 where Senator Jim Molan, himself ex-army, said he received numerous complaints, "passionately held", about commutation.

Mr Carrigy-Ryan said the corporation administered the long-standing rules.

"There does seem to be somewhere in this argument an unfairness," Senator Molan observed.

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