A new study suggests post-traumatic stress disorder is being over-diagnosed in Canada and the western world - a potentially costly situation that could lead to skyrocketing disability claims.

It's a viewpoint that flies in the face of popular opinion as more and more soldiers returning from Iraq and Afghanistan struggle to re-integrate.

Western nations, including Canada, have proactively rejected old stereotypes in an effort to improve services for those grappling with the psychological trauma of war.

But Memorial University psychiatrist Dr. Amin Muhammad warns Canada could face a "huge economic burden" if mental health professionals aren't more cautious about diagnosing the condition.

The study's principal author argues PTSD is complex, not fully understood by clinicians and therefore difficult to disprove once the label is given.

"Many cases of PTSD are not the pure cases but just acute reactions to stress, depression or anxiety disorders," he said.

The Newfoundland-based psychiatrist began looking into the matter after more and more patients - many of them Canadian Forces veterans and immigrants from war-torn countries - started asking him to sign disability claim forms.

His study is based on his own experience, those of his colleagues and the vast amount of literature that currently exists about PTSD. The findings released are preliminary and he hopes to publish the full results early next year.

Muhammad said he's particularly concerned about the diagnosis among soldiers. He believes they should be less susceptible to mental health issues as they are pre-screened and trained to cope with the effects of war.

"Being trained for being tough and resilient and exposure to life-threatening conditions brings in psychological immunity from the adverse effects of such an exposure," he said.

"It is difficult to understand why the veterans and those exposed to such risky jobs would become psychologically fragile and develop PTSD."

He suggested PTSD is becoming a "favourite label" that now elicits more sympathy than stigma.

Citing global figures, Muhammad suggested PTSD accounts for 17 per cent of disability claims among veterans and between 15 and 21 per cent of claims among general psychiatric outpatients.

Figures from Veterans Affairs Canada indicate 67 per cent of the nearly 12,000 veterans receiving disability benefits for a psychological illness have been diagnosed with PTSD.

In 2003, just half of the 3,500 veterans claiming benefits for a psychiatric disorder had PTSD.

More than 7,500 clients currently receiving benefits for a psychiatric condition are post-Korean War veterans and serving members of the armed forces. The disorder is now the fifth most common medical condition for which veterans receive benefits.

Lt-Col. Rakesh Jetly, a psychiatrist and mental health adviser for the Canadian Forces, said the numbers aren't necessarily high.

He suggested many of those receiving psychiatric benefits are Second World War and Korean War veterans who had not been treated previously.

"What's been happening is there's been more education and Veterans Affairs has been ramping up their programs, building their (Operational Stress Injury) clinics," he said.

"Numbers increasing is actually good news because it means people who have been suffering for years are actually now getting care."

PTSD and depression rates based on post-deployment assessments actually stand at about six per cent which is in line with Canadian society as a whole, he said.

He believes PTSD is more likely to be missed than over-diagnosed and that diagnosis and treatment, at least in the Canadian Forces, are standardized and reviewed annually. He said it's not to save money, but to ensure soldiers are getting the best care possible.

As for the resilience of soldiers, Jetly said while militaries around the world have devised programs to try and toughen their troops, there's little evidence it works.

Known as "shell-shocked" following the American Civil War, "combat stress" after the Second World War, or "PTSD" after Vietnam, Jetly said it's been around throughout history "despite training, despite warrior mentalities."

"I can prepare you for combat, but how can I prepare you for your friend sitting next to you being shot and dying in your arms?" he said.