{"id":79989,"date":"2025-11-03T11:26:26","date_gmt":"2025-11-03T00:26:26","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=79989"},"modified":"2025-11-06T11:12:59","modified_gmt":"2025-11-06T00:12:59","slug":"eight-point-plan-to-address-mental-health-safety-net-gap","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2025\/11\/03\/eight-point-plan-to-address-mental-health-safety-net-gap\/","title":{"rendered":"Eight-Point Plan to Address Mental Health Safety Net Gap"},"content":{"rendered":"

Australia\u2019s mental health support system is under strain, and the life insurance industry has a role to play in shoring it up with insurance product redesign, according to a new Actuaries Institute report.<\/p>\n

The report, The Mental Health Financial Safety Net: Unifying Australia\u2019s Fragmented Systems<\/em><\/a>, finds that a patchwork of 22 public and private funding supports, including Medicare, workers\u2019 compensation, and life and private health insurance, collectively provide around $18.5bn a year in financial assistance for people experiencing mental ill-health.<\/p>\n

Of that total, nearly $4bn comes from insurance, including $2.2bn from life and income protection, $900m from workers\u2019 compensation, and $650m from private health cover.<\/p>\n

However, the report warns the system is becoming increasingly unsustainable, with structural gaps and cost-shifting between sectors undermining access, affordability, and equity of care.<\/p>\n

\u201cRising demand is exposing weaknesses across the system, from inconsistent access and affordability to duplication and unmet need,\u201d said lead author and Actuaries Institute member Cindy Lau<\/strong>.<\/p>\n

\u201cThe safety net is uneven, and too many people with mental ill-health are falling through the cracks.\u201d<\/p>\n

TPD insurance<\/strong><\/p>\n

\"\"<\/a>
Click image to access the full report.<\/figcaption><\/figure>\n

The report also highlights challenges in the design of TPD insurance.<\/p>\n

\u201cWith around 60% of life insurance payments due to a mental health condition now made as a single lump sum through TPD insurance, there is growing acknowledgement that such payments may not be the best way to support people experiencing serious mental health issues,\u201d states the report.<\/p>\n

It notes that products paying significant lump sums can create “perverse incentives” that work against the original design and intent of the cover, since they rely on a person establishing they are permanently unable to work.<\/p>\n

Lump sum<\/strong><\/p>\n

The report adds that a lump sum benefit may be less appropriate for mental health conditions than income stream products, which assume an eventual return to work may be achievable.<\/p>\n

Elsewhere, the report looks at the challenges faced by people deemed too high-risk to access affordable insurance premiums.<\/p>\n

\u201cWhile these practices reflect risk mitigation strategies and are subject to anti-discrimination laws, they can contribute to a structural pattern of exclusion, particularly for people with fluctuating or episodic conditions,\u201d the report states.<\/p>\n

…the current model is fragmented and under pressure…<\/p><\/blockquote>\n

\u201cThe ability to obtain insurance, therefore, does not always equate to accessible financial protection.\u201d<\/p>\n

The institute says the fragmented nature of funding and service delivery is eroding the safety net, leaving patients facing significant out-of-pocket expenses, $1.4bn in the year to June 2025, leaving insurers grappling with rising claims linked to mental health conditions.<\/p>\n

The report makes eight recommendations, including:<\/p>\n

    \n
  • Adopting a whole-of-system investment approach to improve integration and sustainability<\/li>\n
  • Implementing a national mental health data strategy<\/li>\n
  • Providing targeted affordability relief for financially vulnerable groups<\/li>\n
  • Redesigning insurance products to deliver more cohesive and appropriate support for people experiencing mental ill-health<\/li>\n<\/ul>\n

    \u201cAustralia has made real progress in recognising mental health as a national priority, but the current model is fragmented and under pressure,\u201d Lau said. \u2028\u201cWithout reform, the strain on both people and systems \u2013 including the insurance sector \u2013 will only worsen.\u201d<\/p>\n

    Actuaries Institute CEO Elayne Grace<\/strong> said addressing these challenges will require coordinated action across government, insurers, and health providers.<\/p>\n

    \u201cThe fragmented coordination of mental health funding and service delivery is failing too many Australians,\u201d Grace said.<\/p>\n

    \u201cWe need a more integrated and sustainable system \u2013 one that strengthens support and makes better use of the role insurance can play in financial protection and recovery.\u201d<\/p>\n

    \"High
    High-level recommendations suggested by the Actuaries Institute.<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

    Australia\u2019s mental health support system is under strain, and the life insurance industry has a role to play in shoring it up with insurance product redesign, according to a new Actuaries Institute report. The report, The Mental Health Financial Safety Net: Unifying Australia\u2019s Fragmented Systems, finds that a patchwork of 22 public and private funding […]<\/p>\n","protected":false},"author":23,"featured_media":79996,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8281],"tags":[],"class_list":{"0":"post-79989","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-associations","8":"category-health-wellness"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/79989","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=79989"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/79989\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/79996"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=79989"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=79989"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=79989"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}