The Returned and Services Association (RSA) has suspended several local branches over unpaid fees and could terminate some altogether.

A chief executive’s update addressed to all clubs — obtained by Newstalk ZB — reveals 24 associations owe a combined $180,000, 28% of the national body's annual take from capitation fees.

It notes this is causing serious cash flow problems for the 109-year-old organisation.

Fifty-one clubs or 28% have also not disclosed their poppy appeal return from this April, which the update notes is mandatory for clubs, not voluntary.

The national body has confirmed 18 clubs have been sent suspension letters and have until August 11 to pay their bills or face potential termination.

The other six are now on repayment plans, it said.

It said the RSA does not believe that misappropriation of poppy funds is in any way at the heart of associations not submitting their returns.

The news follows a number of clubs leaving the organisation over changes to the constitution.

Chief executive Evan Williams said while some associations are experiencing financial difficulties, some have been deliberately withholding payment.

He said a small number of associations within the national RSA have drifted away from the organisation’s core purpose and believe they don’t get value for their annual membership fee.

“It’s in line with their current thinking about if they want to remain as a member of the national body or break away and make their own veteran support organisation.”

Williams said breaking away doesn’t free them up of their obligation to pay their outstanding fees.

He said outstanding fees are a large portion of their annual capitation take and are affecting their ability to support veterans but is not stopping it.

“I’m confident that we will reach an arrangement with the bulk of the defaulting clubs.”

Williams said if the defaulting clubs don’t organise their payment by August 1, then it’s up to the board to discuss potential termination.

He said they are now looking into more sustainable and alternative sources of income.

“That enable us to be less reliant on the capitation, donations and grants.”

Minister for Veterans Chris Penk said the RSA receives annual Government funding to help support the wellbeing of our veterans.

“I have full confidence in its ability to continue delivering this important work.”

Penk said he regularly seeks the views of its national board and is working with the RNZRSA and other veteran groups to improve recognition for veterans.

 “This includes expanding the definition of a veteran through new legislation and introducing a national day to honour veterans, which will be marked annually with Veterans’ Service Awards."