Psychologists say it may be harder for defence force personnel to seek counselling when Bupa takes over the armed forces healthcare contract from July and reduces the fees paid to them for consultations.

The news comes amid growing concern about the alarming rates of mental illness and suicide among defence veterans.

The former defence minister Christopher Pyne announced in January that Bupa would replace Medibank as the Australian defence force’s healthcare contractor from 1 July.

Bupa has subcontracted Victorian Counselling and Psychological Services to provide mental healthcare to serving defence personnel nationally.