The Returned and Services Association has been thrown an economic lifeline from the government.
A one-off grant of $2.53 million has been approved so the RSA can continue to pay welfare grants, as well as offer support to veterans.
The organisation's annual poppy day usually collects between $1m and $2m each year.
However, it was cancelled this year because of the Covid-19 level four lockdown.
Veterans Minister Ron Mark said the money was crucial for the RSA to continue its current level of support.
"The RSA's fundraising has been hit hard by the Covid-19 pandemic.
"This has affected both its ability to maintain its delivery infrastructure and the amount of support it has available to deliver," he said.
An agreement would be made between the RSA and Veterans' Affairs about how the grant would be used, Mark said.
"If it does not receive this funding it will be unable to continue to make welfare grants at its usual level and will be limited in the amount of support it is able to deliver," he added.