Spike in mental health insurance claims sees more Australians leaving the workforce for good

Jamie was once proud to introduce himself as a painter and decorator, a career he held for almost 20 years in the construction sector.

But working as a sub-contractor where he wasn't fully paid for completed works, left him fighting to recoup wages and later diagnosed with depression.

"In my 20 years of working in the industry, I was ripped off by close to half a million dollars," he said.

With assistance from a psychologist, he spent two years getting "work ready" and eventually took on a new job as an employee for a construction business.

But within weeks, he faced a barrage of bullying from his boss, that left him contemplating taking his own life.

He recalls the feeling of confusion and humiliation, as his skill set and experience were questioned in front of colleagues and he was terminated on the spot.

Jamie suffered a major psychological injury.

"I had a serious breakdown," he said.

Jamie said he seriously considered ending his life.

"It's the worst feeling you can ever have in your life."

He was also concerned about possible physical harm from his boss.

"The biggest impact is I cannot go to work and feel safe," he said.

"Now I don't really go out to many places and feel safe at all."

The scale of Jamie's injury left him with an ongoing mental disorder which has permanently forced him out of work.

His life insurance policy provided a one-off payment when specialists ruled he had a permanent mental injury that would stop him from working again.

"I feel workplace bullying has stolen my identity from me," he said.

"I can no longer be the painter and decorator I wanted to be and the same with other personal things in life I wanted to be, I am not sure those things are achievable anymore due to my health.

"I'm a 40-plus year-old disabled pensioner, which sucks to say."

Jamie is not alone.

There has been a sharp rise in the number of younger Australians leaving the workforce permanently because of mental health related diagnoses.

New research from the Council of Australian Life Insurers (CALI) and KPMG looked at a decade of life insurance data analysing both permanent and temporary disability claims.

The data shows an exponential rise in the number of people who are leaving the workforce for good because of their mental health.

CALI CEO Christine Cupitt said there had been an almost 10 per cent increase every year for a decade in the rate of people who put in a claim through their life insurance for total permanent disability (TPD) payments due to mental health conditions.

"They are young people in the prime of their working lives," she said.

"It is telling us that we need an earlier intervention at every step of the process to make sure that people's mental health is supported and that they're not left falling through the cracks."

The biggest increase in mental health claims is in the 30 to 40 year age group, up 730 per cent.

Data also shows:

• Payments for mental health claims now make up almost a third of all permanent disability claims.
• Men are 59 per cent more likely to be permanently disabled due to mental health conditions in 2022.
• White collar workers are 7.4 per cent more likely to be permanently disabled due to mental health conditions compared to blue collar workers in 2022.
• 39 per cent of the increase in temporary disability payments in the past nine years were due to payments made to people with mental health conditions.

The reasons behind the sharp rise in claims are complex and not well understood.

However, more Australians are reporting mental health symptoms, especially younger workers who make up an ever increasing proportion of the workforce, and there's been a greater acceptance of mental health overall.

Nick Glozier, a professor of psychological medicine at the University of Sydney, has been leading research with colleagues at the Black Dog Institute investigating trends in work stress.

"I think the most novel thing we've been looking at is really this concept of a changing sensitivity to stress," he said.

"We have found that the most recent cohort of workers, not only are more likely to have mental health problems before they enter the workforce, but the mental health of a 25-year-old now is more negatively affected by any given level of work stress then 25 years olds were a decade ago.

"And they benefit less from the positive effects of autonomy at work – that is the data shows Millennials, or Gen Z, are less resilient to work stress than previous generations.”

Professor Glozier said the upward trend evidenced in the KPMG report wasn't a new thing.

"It is not a COVID thing, it is not a cost-of-living thing, it all started before that," he said.

He said the rise also coincides with an increase in services.

"There's better access to primary health care, Headspace, vast increase in services and an enormous explosion in workplace mental health programs.

"Corporate mental health is now a global $15 billion industry," he said.

"We've never done more to try and improve mental health at work. And yet, workplace mental health problems are still increasing."

Professor Glozier said some professionals who'd spent decades in the field raising awareness and addressing stigma think that maybe "we have gone too far" and people have become sensitised to seeing the workplace as dangerous, resulting in more workers describing themselves as "burnt out".

However, for those struggling there are many accessible options such as MindSpot, Head to Health, Beyond Blue's six-session NewAccess coaching program, as well as Employee Assistance Programs and clinical services.