The consequences of the surge in mental ill-health conditions are driving Australia’s income support ecosystems to breaking point according to the authors of a new report.
New research commissioned by the CALI and prepared by Super Friend shows 8.5 million Australians accessed some form of income support in the past year, at a cost of $78.9bn.
The ecosystem spans:
- Employer-funded sick leave
- Workers’ compensation
- Social security payments
- Life insurance
- Motor vehicle compensation schemes
- Veteran compensation and pensions
- Early access to superannuation
The report – Cross Sector Update – Mapping Australia’s Ecosystem of Income Supports – finds around two million more Australians are receiving income support payments compared with a decade ago, with mental health conditions a key driver of claims growth across government, employers, and insurers.
CALI’s CEO Christine Cupitt said the trend was testing the system’s capacity.
“This report shines a light on a major productivity challenge facing our nation,” she said.
“More and more Australians are taking time off work and getting financial support because they’re injured or sick, with mental health conditions often the main reason.
“The surge in mental health claims is testing the income safety net’s ability to cope because it wasn’t built with mental health in mind.
“No single part of the safety net can tackle this challenge alone. We need a connected and coordinated approach, led by the Federal Government, to respond to the productivity challenge of mental ill-health in our community.”
Cupitt said life insurance typically plays a role later in the process, when claims are more complex and longer in duration.
…the longer someone is out of work, the less likely they are to return to work…
Mental ill-health accounts for around one in three total and permanent disability claims and one in five income protection claims, according to the report.
In 2023-24, life insurers paid $8.3bn in benefits to about 55,000 Australians unable to work, representing around 11% of total national income support.
Dr Ross Iles, Chief Research Officer at Super Friend, said the findings showed Australians did not have a single, clear income support pathway and that navigating support could be confusing.
“Participating in work has clear health benefits, both on physical and psychological levels for individuals, and on multiple levels of society in general. However, the longer someone is out of work, the less likely they are to return to work,” he said.
Click here for the full report.
