Financial pressures are shifting how Australians approach mental health support, with a growing number now turning to government assistance rather than traditional personal networks.
New data from the Council of Australian Life Insurers (CALI) revealed a significant change in behaviour, as nearly 40% of Australians said they would seek government support if mental ill-health prevented them from working.
This preference for public financial aid over familial or social support has emerged for the first time since early 2024, underscoring the broader impact of rising living costs on household resilience.
CALI CEO Christine Cupitt said the trend reflects changing realities for many families.
“When we see Australians choosing the government over their own families and friends in tough times, it’s a clear alarm: families are struggling, and the safety nets they once relied on just aren’t enough anymore,” she said.
The research also highlighted declining insurance engagement. Around 71% of Australians reported concerns that economic conditions might prevent them from obtaining or retaining life insurance.
Among respondents, 62% identified affordability as the primary barrier to coverage, a significant increase compared to those citing lack of perceived need, which dropped to 30%.
Affordability concerns were most pronounced among those earning under $100,000 annually. Gender disparities were also evident, with 53% of women indicating they couldn’t afford coverage, compared to 33% of men.
According to CALI, life insurers remain a key source of financial support for individuals with mental health-related claims, second only to government benefits.
“Life insurers play a crucial role in people’s lives. We offer peace of mind and provide a financial safety net during life’s biggest challenges, but before customers come to us, they’ve often sought support elsewhere,” Cupitt said. “No one wants to be so unwell that they can’t work, and mental health is an area where the government, experts, and our entire community can make a positive influence early on.”
A separate report commissioned by CALI and developed by KPMG, “Australia’s Mental Health Check-Up,” sheds further light on the issue.
It documented a 732% increase over the past decade in total and permanent disability (TPD) claims related to mental illness among individuals aged 30 to 40. This demographic recorded the steepest growth in such claims across all age groups.
The average age for mental health-related TPD claims has decreased to 46 years, compared to 49 a decade ago. In contrast, the average age for physical disability-related claims has held steady. Men remain more likely than women – by roughly 60% – to file mental health-related TPD claims.
Mental health challenges are also affecting those within the insurance industry. A 2024 survey by the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) found that nearly half of industry professionals experienced negative mental health outcomes linked to job-related stress.
Additionally, 90% of respondents said they believed the public views the industry unfavourably, with nearly 20% noting that such perceptions have impacted their self-confidence.
On the policy front, the Australian Labor Party has pledged $1 billion, while the Coalition announced an additional $400 million for youth mental health initiatives, supplementing a previous $500 million plan to double Medicare-funded mental health sessions.
Medibank has welcomed the recent election-related mental health funding commitments.
“Mental health is an urgent national priority, and it’s pleasing to see bipartisan support for such a crucial issue. These are landmark commitments that recognise the challenges in mental health,” said David Koczkar, CEO of Medibank. “Our mental health system is at breaking point, in many parts it’s broken, and the number of people with mental ill-health is growing at an alarming rate.”
