Poor mental health forces young people out of work

Mental health concerns are driving increasingly younger people permanently out of the workforce, new research suggests.

The Australia’s Mental Health Check Up report by KPMG — commissioned by the Council of Australian Life Insurers (CALI) — highlights an unprecedented 732% 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.”

Tracking trends through data

The data shows Australians are leaving the workforce for good because of mental ill-health at a younger age than ever before. The average age of people who claim is now 46 years old, while a decade ago, the average was around 49 years of age.

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% higher claims rate compared to women.

Almost 80% 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% every year while the rate for other physical causes of claim has only increased by 0.5% annually.

“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,” said Briallen Cummings, KPMG Partner and report author.

“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.”

Far-reaching consequences

Australia’s life insurers fear that this unprecedented rise in workforce departures 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,” 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.”

Image credit: iStock.com/skynesher. Stock image used is for illustrative purposes only.