An alarming number of Australians in their 30s are leaving the workforce permanently because of their mental health, according to new research commissioned by the Council of Australian Life Insurers (CALI).
The Australia’s Mental Health Check Up report by KPMG shows there’s been an unprecedented 732 per cent increase in Total and Permanent Disability (TPD) claims for mental health for 30- to 40-year-olds over the past decade. It is the biggest spike across all age groups.
“The unprecedented number of people leaving the workforce permanently in the prime of their working life has huge implications for them personally, for their loved ones, for our national economy and for our already stretched government support systems,” said CALI CEO Christine Cupitt.
“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 data shows Australians are leaving the workforce for good because of mental ill-health at a younger age than ever before, with the average age of people who claim now 46 years old. The average was around 49 years old a decade ago.
By comparison, the average age for other physical causes of permanent disability claim has remained stable at 49 years of age over the same timeframe.
The research also shows that men are far more likely to be classed as permanently unable to work because of mental ill-health with an almost 60 per cent higher claims rate compared to women.
Life insurers are the largest private sector provider of financial support to people experiencing mental health challenges, second only to the Federal Government.
“We’re helping people every day and will continue to sustainably play our part. Australia’s life insurers are investing more than ever in this kind of data so we can share it with the community and show just how significant the impacts of mental ill-health are on Australians from all walks of life.”
Almost 80 per cent of the overall increase in the number of permanent disability claims in Australia over the past decade is due to the exponential increase in mental health claims. They have gone up by almost 10 per cent every year while the rate for other physical causes of claim has only increased by half a per cent annually.
“At the end of the day, it’s Australian taxpayers who’ll be footing the bill if these trends continue as government safety nets and payments are stretched beyond capacity.”
KPMG Partner and report author Briallen Cummings said: “The significant rise in mental health conditions over the past decade is a real concern for the community and this is reflected in the life insurance data shown in our report.”
“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,” Ms Cummings said.
Australia’s life insurers fear that this unprecedented rise could have a flow on effect on the affordability of life insurance and the ability of insurers to provide meaningful cover for what is a rapidly growing number of people who are severely incapacitated by mental ill-health.
“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,” Ms Cupitt said.
“This can’t just be left to private industry to manage once people are at the end of the road. No one wants to find themselves severely unwell with no other option than to make the life changing decision to leave the workforce permanently.”
Read the full KPMG report on mental health claims here. Please note, data relates to retail life insurance policies only. It does not cover policies obtained through superannuation funds.