Australian Defence Force personnel could be up for a $50,000 cash bonus under a federal government push to expand the size of the nation’s military.

The Albanese government will set aside $400 million for retention bonuses to help reduce the thousands of personnel leaving the armed forces.

Permanent ADF members will be eligible to receive a $50,000 bonus payment near the end of their initial mandatory period of service if they commit to the military for another three years.

Under the scheme, 3400 personnel will be able to benefit within the first three years.

The bonus will not be tax-free and there will be a pro-rata clawback for members who leave early.

Defence Personnel Minister Matt Keogh said the rationale for the up-front payment was to provide a real value the member and their family can use.

He said adjusting the bonus to pay scales wouldn’t provide the same incentive.

It is modelled off other bonus schemes within the force.

“Having a lump sum of this nature does create that incentive for someone to sign on for the additional three years so that we don’t have a loss of people after that initial service period,” Mr Keogh told reporters in Canberra on Tuesday.

“So if they want to put that money towards a housing deposit, or a new car or whatever it is they need in their family, that gives them a lump sum they are able to access to do that.”

The government has identified the ­recruitment and retention of personnel as an immediate priority, in response to the defence strategic review.

However, frequent postings uprooting families to different regions across the country, and a lack of career and employment opportunities for military spouses are among the biggest issues for personnel.

A $2 million review of defence housing will also take place to help improve home ownership rates among serving personnel.

Defence Minister Richard Marles said the government was working to make the force more attractive to Australians.

“We need to be telling the story to young Australians about the opportunities that exist in working in the defence force and pursuing a career in uniform,” he said.

“They’re making a difference and serving our nation.”