More than 8 million Australians now receive some form of income support, a rise of roughly 2 million over the past decade.
Mental health conditions account for about one-third of claims across major income support schemes, according to data from Monash University and SuperFriend for the Council of Australian Life Insurers (CALI).
Key Details
- The report examined 11 income support systems, including employer sick leave, workers' compensation, social security, superannuation, and life insurance.
- The majority (about 7.5 million) use employer-provided sick leave, typically for around three weeks. However, more people are exhausting sick leave and moving into longer-term support.
- Mental health claims are described as more complex and longer in duration.
Statements from Stakeholders
"The entire safety net is under strain."
— Christine Cupitt, CEO of CALI, who called earlier intervention critical.
Associate Professor Ross Iles from Monash University noted fragmentation across schemes with different eligibility rules, medical evidence requirements, and application processes. He stated that the longer a person is out of work, the less likely they are to return.
Life insurers are advocating for earlier, better-coordinated support and a government-led overhaul to link the 11 systems, including consistent mental health definitions, shared data, and smoother transitions between supports.
Example Case
Lauren Frahamer, a 30-year-old former stage manager, stopped working due to long COVID. She received partial income protection in mid-2022 and now works nine hours per week in client support. She stated that without income protection, she would have had to move back with her parents.
Financial Context
Approximately $80 billion per year is spent on income support, not including lost productivity, according to Associate Professor Iles.