In a bid to placate angry veterans, the Conservative government has announced a plan to improve benefits for soldiers wounded in the line of duty.

The government says more than 4,000 wounded Canadians will receive the new benefits over the next five years.

In a news conference Sunday, Defence Minister Peter MacKay said the initiative, which is expected to cost $2 billion over the next 25 to 30 years, includes an extra $200 million for Canada's most seriously wounded veterans and those with the lowest incomes.

Under the new plan, veterans who cannot return to work because of their injuries will now receive an extra payment of $1,000 each month for the rest of their lives. That's in addition to a lump sum payment, the 75 per cent of salary at discharge that's paid until age 65, and a monthly allowance of between $536 and $1,609.

"This is an action to provide our veterans with additional support, which they deserve," Veterans Affairs Minister Jean Blackburn told reporters.

Afghanistan veteran Major Mark Campbell, who lost both his legs in a landmine blast, welcomes any additional benefits for wounded soldiers. But he thinks tying compensation to rank and salary is wrong.

"Seventy-five per cent of a private's salary is well below the poverty line," Campbell told CTV, explaining that he'd prefer to see a return to injury-based compensation.

"Why is a corporal who's missing two legs entitled to $37,000 a year, and me as a major I'm entitled to $75,000 a year based on the 75 per cent insurance model. How is that right? It doesn't matter if you're a corporal or a major, you're missing your legs and that's the rest of your life."

The current system of lump sum payment and income replacement was instituted with the new Veteran's Charter conceived by the Liberals in 2005 and enacted by Harper's Conservatives the following year.

Veterans have argued that the lump sum is too small, and that ending the monthly cheque at age 65 will leave them penniless in their old age. The criticism has been accompanied by calls for a return to the lifetime pensions that were given after World War Two.

The issue was thrust into the spotlight last month, when veterans and their ombudsman, retired colonel Pat Stogran, accused "penny pinching" bureaucrats of blocking benefits for wounded soldiers.

It was subsequently revealed that the government will not renew Stogran's contract when his term comes to an end in November.

The timing of Sunday's announcement, one day before Parliament resumes with an opposition poised to attack the government on its handling of veterans' issues, appeared aimed at heading off the criticism.

When asked, Canada's top soldier army commander Lt. Gen. Peter Devlin steered clear.

"Anything that benefits our guys and gals in uniform, particularly those that have been hurt, we're very pleased about," he told CTV News following the morning's annual Army Run in Ottawa, refusing to comment on the politics of the announcement.

Maj. Campbell acknowledged the day's announcement is a "step in the right direction," but openly wondered why it's coming now.

"I tend to be a glass half full kind of guy, but in this case when it comes to Veterans Affairs I'm a cynic. I'm not convinced they're doing the right things for the right reasons," he said.

A study commissioned by the veterans ombudsman took aim at the lump-sum system, which can be up to $276,000 for the most severe injuries.

Campbell said the plan amounts to, "$250,000 and a handshake, basically."

Noting that a soldier who lost three or more limbs would be paid the same amount as a veteran like himself who lost two, the army's senior serving uniformed disabled member called the new Veterans Charter "a joke."

"I tell you what, somebody somewhere screwed us, they screwed us hard, the new generation of veterans. About a 40 per cent loss of financial compensation and benefits as compared to the previous pension act. We really got screwed over."

The new benefits plan must pass through the House of Commons before taking effect.

With files from CTV's Roger Smith and The Canadian Press