The relationship between financial wellbeing and mental health has become increasingly pronounced in Australia, with a growing body of evidence highlighting how the cost of mental health services and broader cost-of-living pressures are creating significant barriers to care. As financial stress escalates across the population, the accessibility and affordability of mental health support have emerged as critical concerns, particularly for young people, women, and those in regional areas. This article examines the financial dimensions of mental health care in Australia, exploring the rising costs of services, the impact of financial stress on mental wellbeing, and the systemic barriers preventing adequate access to support.
Escalating Costs of Mental Health Services
Australian mental health service users are facing substantial financial barriers when accessing care. Data from the Australian Institute of Health and Welfare reveals that out-of-pocket costs for Medicare-subsidised mental health services have risen dramatically, particularly among younger Australians. Those aged 15-24 years old experienced a 52% increase in out-of-pocket costs between 2020-21 and 2022-23, paying an average of $57.69 per service in 2022-23 compared to $37.91 two years earlier.
These cost increases have far outpaced general inflation, rising at 4.5 times the rate of Consumer Price inflation over the same period. When comparing different age groups, the financial disparities become even more stark. Young people aged 15-24 pay 35% more per service than those aged 45-64, and nearly double that of 65-79 year olds, creating a generational divide in access to mental health care.
The specific costs for different mental health professionals reveal additional financial burdens. In 2022-23, Australians paid an average of $86.10 for a Medicare-subsidised non-inpatient appointment with a psychiatrist, $61.57 for a clinical psychologist, and $66.79 for a non-clinical psychologist. These costs accumulate over multiple sessions, as Dr. Erin Dakin, Youth Mental Health Research Lead at System 2, notes: "The average person requires multiple sessions to get the help they needed" and costs become "even more out of reach once the annual limit of ten subsidised sessions in a care plan is passed."
Financial Stress and Mental Health Correlation
The financial pressures affecting Australians have reached unprecedented levels, directly impacting mental health outcomes. According to the National Mental Health Commission's findings, financial stress has almost doubled since 2020, rising from 17.1% in November 2020 to 34.6% by January 2024. This represents a significant portion of the population experiencing financial difficulties that correlate with mental health challenges.
Research from The Australian National University, which surveyed 4,200 Australians, found that over 30% are finding it "difficult" or "very difficult" to get by on their current income. This financial strain directly impacts mental resilience, with Beyond Blue's survey of more than 5,000 people revealing that one in three Australians reported cost-of-living pressures had negatively impacted their mental health either "quite a bit" or "an extreme amount" over the previous 12 months.
The relationship between financial stress and mental health service utilization has become increasingly apparent. Among Australian Psychological Society (APS) member practices, the number of clients seeking help for anxiety and depression related to financial stress has increased by over 50% in the past year, with around 20% of all client appointments currently related to the cost-of-living crisis. APS CEO Dr. Zena Burgess emphasizes that "the link between money worries and mental health is strong" and can affect the whole family, noting that "many people are turning to psychologists for the first time, as they are struggling to cope with financial stress."
Disproportionate Impact on Vulnerable Populations
Financial stress and the associated mental health impacts are not evenly distributed across the population. The National Mental Health Commission's 2024 report highlights that women and young people are disproportionately affected by financial pressures. Young people, in particular, face a dual burden of rising mental health service costs and the broader cost-of-living crisis, creating significant barriers to accessing care.
The System 2 Youth Advisory Board, comprising twelve young Australians, confirmed that while rising costs are a major barrier, other factors include local availability of appropriate services, waiting lists, and stigma. Kushagra Rathore, a 22-year-old from Perth and member of the Youth Advisory Board, commented: "One of the biggest barriers to accessing mental health care is the financial strain."
Regional disparities further compound these challenges. The National Mental Health Commission report found that percentages of people experiencing mental and behavioral issues were significantly higher for people living in inner or outer regional Australia compared to those in major cities. This geographic disparity in mental health outcomes is compounded by limited access to affordable services in regional areas.
Women consistently report more anxiety about money than men, with financial stress affecting different demographics in varying ways. This gender disparity in financial anxiety contributes to the broader pattern of unequal mental health outcomes across the population.
Barriers to Accessing Mental Health Care
The cost of mental health treatment remains a significant barrier to care, with over one in five Australians delaying or forgoing care due to cost. This trend is increasing each year and contributes to treatment rates falling below targets. Beyond financial considerations, multiple barriers prevent individuals from accessing needed mental health support.
For many Australians, financial stress leads to difficult choices about essential expenses. Sara Jane Hammond, a 45-year-old Australian facing financial anxieties, exemplifies the difficult decisions being made: "We actually decided that we were going to put my place on the market... I sold that so that we could pay off my partner's mortgage and try and be debt-free." Her experiences of skipping meals, cancelling her gym membership, and moving in with her partner reflect the broader sacrifices being made due to financial pressures.
The increased financial stress has led to a surge in demand for mental health services. Lifeline received more than 26,000 searches for assistance and support through its website in January 2023, its highest on record. Additionally, referral searches by helpline counsellors relating specifically to financial issues and homelessness went up 49% between August 2022 and January 2023.
These barriers create a cycle where financial stress leads to mental health challenges, which in turn can exacerbate financial difficulties through reduced productivity, increased healthcare costs, and potential impacts on employment. Breaking this cycle requires addressing both the financial determinants of mental health and the accessibility of mental health services.
Systemic Challenges and Service Strain
The relationship between financial stress and mental health has placed significant strain on Australia's mental health system. As more Australians experience financial difficulties, the demand for psychological services has increased substantially. However, the system faces challenges in meeting this demand effectively.
Psychologists are in high demand due to widespread financial strain and associated mental ill-health, but the profession itself faces challenges with heavier workloads and higher costs. Fees have not risen enough to compensate for increased demand, raising concerns about whether the mental health workforce has adequate support to respond effectively.
The National Mental Health Commission recognizes that "planned service delivery is essential to meeting people's needs and requires greater integration across services, including health, housing, and financial supports." This integrated approach acknowledges the complex interplay between financial wellbeing and mental health, suggesting that solutions must address multiple aspects of individuals' lives simultaneously.
The Australian Psychological Society highlights that it has never been more important for the profession to understand the relationship between financial and mental health – and to look after their own wellbeing at the same time. This dual focus on client care and practitioner wellbeing reflects the systemic challenges within the mental health sector.
Pathways to Improved Access and Support
Addressing the financial barriers to mental health care requires multifaceted approaches at both systemic and individual levels. The Professional Association for Counsellors and Psychotherapists in Australia (PACFA) emphasizes that "counselling and psychotherapy can play a greater role in delivering accessible and flexible mental health support, often providing services at a more accessible price point." This recognition of alternative service models highlights potential pathways to improving access.
PACFA also notes that their registrants and members are doing "fantastic work in regional and remote communities," suggesting that expanding these community-based services could help address regional disparities in mental health access.
The National Mental Health Commission's call for greater integration across services – including health, housing, and financial supports – represents a systemic approach to addressing the complex relationship between financial wellbeing and mental health. This integrated model acknowledges that mental health cannot be addressed in isolation from other determinants of wellbeing.
At the individual level, understanding the relationship between financial stress and mental health can help people recognize when they need support. The increased willingness of Australians to seek help for financial stress-related mental health issues, as evidenced by the rise in appointments related to cost-of-living concerns, suggests that stigma around these issues may be decreasing.
Conclusion
The financial dimensions of mental health care in Australia reveal a complex interplay between rising service costs, broader financial stress, and mental wellbeing outcomes. Young people are particularly burdened by mental health service costs, paying significantly more than older Australians while simultaneously facing the cost-of-living crisis. The disproportionate impact on women and those in regional areas further highlights the need for targeted approaches to improve access.
The statistics paint a concerning picture: financial stress has almost doubled since 2020, over 20% of Australians are delaying or forgoing mental health care due to cost, and a third of the population is finding it difficult to get by on their current income. These financial pressures directly correlate with increased demand for mental health services, creating a challenging cycle for both service users and providers.
Addressing these challenges requires systemic change that integrates mental health support with broader financial wellbeing initiatives. The recognition by organizations like PACFA and the National Mental Health Commission of the need for greater service integration and accessible alternative care models represents important steps forward. However, significant work remains to ensure that mental health care is financially accessible for all Australians, regardless of age, gender, or geographic location.
As the relationship between financial stress and mental health becomes increasingly apparent, addressing both the cost of mental health services and the broader determinants of financial wellbeing will be essential for improving mental health outcomes across the population.