The veterans' affairs minister has been put in charge of negotiating the terms of reference for the inquiry.

But independent senator and former soldier Jacqui Lambie has panned the "absolutely nuts" appointment, given his department will come under scrutiny.

Mr Chester said he was surprised by the criticism.

"Jacqui and I have very different approaches - she is a more divisive figure and if she wants to hurl abuse at me that's fine for her, that's not the way I do my job," he told Sky News on Wednesday.

"I'm very happy to listen to Jacqui's concerns when it comes to the terms of reference. I'm very happy to follow up issues on behalf of Jacqui as I've done many times over the past three years."

The minister said he and Senator Lambie had worked well together in the past.

"When Jacqui's office has contacted me, we've been able to follow up and help veterans together, so I'm surprised with her approach."

Mr Chester said his role in the royal commission was completely normal practice.

"When we've had the royal commission for disability and aged care the minister responsible does the initial work in terms of shaping the terms of reference," he said.

"But then it goes to the attorney-general and becomes an independent process from there."

The minister said his office was already consulting members of the veteran community to ensure the inquiry could do some good work.

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Australian Associated Press