A growing number of Australians in their 30s are leaving the workforce permanently due to mental health issues, according to findings from a new report commissioned by the Council of Australian Life Insurers (CALI).
The “Australia’s Mental Health Check-Up” report, prepared by KPMG, found a 732% rise in mental health-related total and permanent disability (TPD) claims for individuals aged 30 to 40 over the last decade. This age group experienced the most significant increase in such claims compared to others.
CALI CEO Christine Cupitt said the number of people in their prime working years exiting the workforce due to mental ill-health has profound consequences for individuals, families, the economy, and public support systems.
“These are very concerning generational trends that show the frequency and severity of mental ill-health is rising exponentially in our community. No one wants this to be their story,” she said.
The report revealed that the average age at which Australians file TPD claims for mental health reasons has declined, dropping from 49 years a decade ago to 46 years today. This contrasts with claims for physical disabilities, where the average claimant age has remained stable at 49 years during the same period.
The report also highlighted gender disparities. Men were found to be almost 60% more likely to file TPD claims for mental health issues than women.
The findings come as mental health issues are also being highlighted within the insurance sector itself.
A wellbeing survey conducted in 2024 by the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) revealed that 48% of insurance professionals reported job-related stress had negatively affected their mental health in the past year.
Negative public perceptions of the insurance industry also emerged as a challenge, with 90% of survey respondents believing the industry is viewed unfavourably by the public. Nearly one in five said this perception had affected their self-esteem.
According to the KPMG report, mental health-related TPD claims have driven nearly 80% of the total increase in permanent disability claims in Australia over the past decade. Claims in this category have risen by nearly 10% annually, compared to a 0.5% annual growth rate for claims related to physical disabilities.
KPMG partner and report author Briallen Cummings pointed to the severity of mental health conditions as a key factor.
“We see not only an increase in the overall proportion of people experiencing mental health conditions, but also an increase in the severity of those conditions,” she said.
The report raised concerns about the broader economic and social implications of these trends, including potential increases in public spending on welfare programs.
CALI warned that without greater intervention, the growing strain on government support systems may lead to higher costs for taxpayers.
Cupitt said earlier interventions are needed to prevent people from reaching the point where leaving the workforce is their only option.
“This is far bigger than us. While governments are already thinking seriously about Australians’ mental health, we now have further evidence that our community needs more, including a stronger and earlier safety net to keep people from falling through the cracks,” she said.
