A wide-ranging review of Australian mental health has pointed to the welfare system, particularly the troubled jobactive program, as a key driver in the crisis. By Rick Morton.

Mental health cost of welfare

It wasn’t until Renna itemised her life and read it out aloud to a room filled with strangers that the relentless penury of her existence became clear in her mind.

She could see her own life as if from outside it then; she could feel the stabbing pain of that ceaseless struggle.

“I’m sorry,” she said as the tears came and her voice broke while addressing a senate hearing about the rate of the Newstart Allowance on Wednesday afternoon. “I don’t often sit down and do this. I run a very tight budget, but looking at this I was in tears the other night. It’s quite emotional. I feel exhausted.”

For the two days prior, Renna had skipped taking the medication she is prescribed for a mental illness to save money. It was under these circumstances she detailed to the inquiry just how far $450 each week goes towards supporting her and her 11-year-old daughter.

“About 12 months ago, the pressure from the job networks became quite difficult,” she said. “They were insisting that I either go back to full-time work or full-time study, so I managed to scrape around, beg and borrow about $2000 for a car. I’m not sure if that was good or bad because the expenses of having a car are huge.”

Her story is instructive.

There is a link between an unbending regime of “compliance” checks in Australia’s social security system, the poverty many of its subjects face and the cost of mental illness. It was established last week, by none other than the federal government’s own economic advisory agency, the Productivity Commission.

In its 1261-page interim report, the commission rebuked Australia’s $7 billion jobactive program for providing “limited assistance” and “penalising” participants with mental ill-health, including those with complex needs.

Previously unpublished data provided to the commission by the Department of Employment revealed “outcomes for jobactive participants with mental illness are worse than others”.

“People deemed to have mental illness made up 13 per cent of the jobactive cohort in February 2019, but only just over 7 per cent of job placements found between July 2015 and February 2019,” the report says.

The commission recommended the removal of 50,000 people with mental illnesses from that beleaguered program and Disability Employment Services. Instead, it says, they should be placed on the Individual Placement and Support program, currently used for only about 2000 people nationwide.

It also called for sweeping health reforms, including a doubling of the number of Medicare-funded psychological consultations available each year – from 10 to 20 – and a radical expansion of the $9.2 billion Carer Payment and Carer Allowance.

Unlike any previous government-led inquiry into the issue of mental health, the Productivity Commission was able to look beyond the health system, which desperate governments have funnelled billions into during the past decade, faced with climbing suicide rates and calls for action on mental health.

Figures in the commission’s report reveal the folly of such an isolated approach. It found the single largest direct government expenditure on mental health is income support for people with mental illnesses and their carers, which costs almost $10 billion each year.

The Commonwealth spends half this amount on Medicare rebates to the mentally ill. And as it squeezes income support, choices get taken from people.

Holly Rolfe was on the Newstart Allowance, in and out of homelessness, while she was a full-time carer for her disabled sister.

“I was living in my car in a university car park,” she told the senate’s Newstart inquiry on Wednesday. “Without university, I don’t know where I would have been. Not knowing where I was night to night and not wanting to ask people for help, it’s shameful.”

Holly says she was in the process of applying for the disability pension, but due to her tumultuous circumstances this has not been finalised. Another family member now cares for her sister and they have yet to be approved for the carer payment.

Kelly Clark, a young Aboriginal woman with complex mental health conditions who was homeless but now works part-time with the Youth Affairs Council of Western Australia, also addressed the inquiry this week.

“One of the things that I have experienced myself … is the utter stress of living on Centrelink payments that are inadequate,” she said. “Me having to choose between going to therapy to actually get better or having food. Choosing between going to work or having food, between having stable housing or having food. These are things you shouldn’t have to choose between.”

Clark drew the link between the punitive nature of the welfare system and struggles with mental health. “I am fairly confident that I would not meet the criteria for my chronic severe mental illness if I didn’t have to scrape by every week,” she said, “if I could afford therapy and food.”

Most therapy is not covered by Medicare and, if it is, the number of rebated sessions each year is capped at 10. For people with moderate to severe issues, the average length of treatment is between 15 and 20 sessions. Private health picks up some of the gap, if you can afford it.

The former commissioner of the National Mental Health Commission, Ian Hickie, a psychiatrist and co-director of the University of Sydney’s Brain and Mind Centre, shares a sobering thought. “For the first time ever, the No. 1 reason young people are sticking with private health isn’t obstetrics; it’s for mental illness,” says Hickie.

Nowadays the public system provides a safe, comfortable and affordable option for women to give birth.

“[But] you just cannot get a bed in a public hospital if you have serious mental illness,” he says.

While beds in the private system are booming, a young individual will pay between $294 and $488 a month for private cover.

The average private cover for psychiatric admissions is $4200 a year – a quarter of a single person’s entire income on the Newstart Allowance.


If Australia’s suicide rate since 1991 were plotted as a line graph, it would look somewhat like a jagged mountain range that dips in the middle before rising again – a sort of topographical affront to modern intervention.

The most recent data shows that the number of deaths per 100,000 people from suicide is about 12, the same as it was almost two decades ago, in 2002. It is only fractionally better than the rate of 14 deaths in 1991.

University of Melbourne emeritus professor Tony Jorm thought it would be illustrative to plot 17 government programs, plans and milestones against the suicide rate from that time, starting with the rise in antidepressant use in the early 1990s.

He also listed the development of the first National Mental Health Plan and government-funded suicide awareness campaigns.

“We seem to be getting nowhere,” he tells The Saturday Paper. “And you’ve got to remember this is against the backdrop of decades of antidepressant use, billions of dollars in government interventions and we’re back to square one.”

Jorm notes the highest suicide rate in Australia occurred during the Great Depression, when unemployment across all age groups peaked at almost 20 per cent. It dipped to its lowest point during World War II, largely because people were united in a common cause.

“[There hasn’t] been a recognition that this is not just a Health Ministry problem, this is a whole-of-government issue that requires dealing with poverty, unemployment and other disadvantage,” Jorm says.

And so, the Productivity Commission has branched out and recommended the federal government should “increase the quantum of [Commonwealth] funding for state and territory government-provided housing and homelessness services”.

The commission has also directed the National Disability Insurance Agency, which is due to fund about $700 million of supported disability accommodation each year, to open up the program “with a view to encouraging development of long-term [accommodation] for NDIS recipients with severe and persistent mental illness”.

It said the federal government should broaden the requirements for both the Carer Allowance and Carer Payment, expanding the number of recipients by tens of thousands of people.

These are no small measures.

Without mentioning robo-debt or the rate of Newstart, which has not risen in a quarter-century, the commission said: “People experiencing financial stressors, such as low income or poverty, and/or compromised financial security, such as being unemployed or having excessive debt, are at increased risk of developing a mental illness.”

On the targeted compliance framework for welfare recipients, the commission says “there are good reasons and plausible evidence that this could aggravate the severity of [pre-existing mental] illness and increase distress”.

Employment Minister Michaelia Cash seems unconvinced by the Productivity Commission’s findings.

“The government makes no apologies for trying to get people off welfare and into work,” she told The Saturday Paper.

“The Morrison government spends billions every year to provide job-seekers the best opportunity for employment that works for them.”

But experts say we are in a race against time.

In a submission to the Productivity Commission, the Australian Research Council Centre of Excellence for Children and Families over the Life Course laid out its research into why young people aged 18 to 26 end up on the disability pension for mental health.

The centre found these recipients were 1.6 times more likely to do so if their parent, or parents, were in receipt of the same payment when the children were aged eight to 15.

No other payment has a stronger predictive effect. Others, such as the single parent pension and Newstart Allowance, also equate to a surge in likelihood that children will develop mental health disorders later in life.

The clear implication is that saving one life can have a multiplier effect, particularly if the person is young or the parent of a young child.

The clinical director of youth early psychosis for headspace, Roger Gurr, says this childhood trauma has a very real effect on the brain, freezing children developmentally at moments of extreme distress.

“It’s no accident. Evolution doesn’t allow accidents,” he says.

“The problem comes because the child’s brain gets changed to help it in the toxic environment until puberty then … the brain is going to stop growing and it is going to be pruned for efficiency, so the brain can be changing plastically to achieve efficiency, and that can actually exacerbate the problems.”

Of the people who actually end their lives, Gurr says, three-quarters have developmental trauma. Yet the mental health system is absurdly ill equipped to deal with this fundamental problem.

“I sit in on the headspace intake meetings, so not only do I just see this severe trauma walking through the door. I see that poor old primary care headspace is only designed to do mild to moderate, and doesn’t have any long-term trained staff,” he says.

The Productivity Commission has recommended the Department of Health “should cease directing Primary Health Networks to fund headspace centres, including the headspace Youth Early Psychosis Program” because the money may be better spent elsewhere.

“They don’t have psychiatrists and others to ensure that you get a full diagnostic process and, even then, the process doesn’t know where to refer these young people,” Gurr says.

He offers an experience from his practice.

“I myself have tried to refer people to local health district staff. I have done searches around Western Sydney to find any psychologists who actually have the skills that I think are needed, and that are prepared to take on that age group with developmental trauma, and I’ve only found one,” he says.

“In the whole of Western Sydney.”

As Renna wound up her testimony to this week’s senate hearing, she noted that she’d been deliberately austere in her submission. Like her life, there was nothing flashy about what she wanted to tell the committee.

“I could have brought a lot more story to it, but I thought, ‘I want to really give evidence in a way that says, This is the reality of it,’ ” she said.

Instead, her final words were offered with heartbreaking uncertainty about the future. “My daughter is 11 and about to go into high school and I’ve got four years of university before I get any qualification,” she said.

“I just wonder how I am going to get through. There is no end in sight.”

This article was first published in the print edition of The Saturday Paper on November 9, 2019 as "Mental health cost of welfare".

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Rick Morton is The Saturday Paper’s senior reporter.

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