RESEARCH PAPER SERIES, 2021–22   23 May 2022

Mental health services in Australia: a quick guide

Dr Rosalind Hewett and Dr Emma Vines

Social Policy

WARNING: The following quick guide includes information on suicide and mental illness. For help or information contact Beyond Blue on 1300 224 636, or Lifeline on 13 11 14.

1 Introduction

Mental illnesses are health conditions that involve significant changes to thinking, behaviour or emotions. Although mental illness can occur at any age, three quarters of all mental illnesses begin by age 24. Some mental illnesses are mild and may only have a limited impact on daily life, while others may require hospitalisation. Mental illnesses include:

• Anxiety

• Depression

• Personality disorders

• Schizophrenia

• Bipolar disorder

• Post-traumatic stress disorder (PTSD)

• Eating disorders

In Australia, the framework for mental health services is a highly complex mixture of public and private systems, with funding shared between the Australian Government, state and territory governments, individuals and private health insurers.

This quick guide provides an overview of mental health in Australia, including spending on mental health services, government responsibilities, recent policy developments and key issues.

1 Prevalence

Estimates of the prevalence of mental illnesses among the Australian population vary, due to ongoing stigma attached to seeking a diagnosis and treatment, as well as the impact of external events on people’s mental wellbeing and resulting fluctuations in the incidence of mental health concerns. Natural disasters, for example, can cause poor mental and physical health, although most people recover well following these events, while the prevalence of common forms of mental illness, such as depression and anxiety, may more than double during a humanitarian crisis.

In 2017–18, the Australian Bureau of Statistics’ (ABS) National Health Survey found there were 4.8 million Australians (20%) with a mental or behavioural condition, compared with 4 million Australians (18%) in 2014–15. The 2007 National Survey of Mental Health and Wellbeing estimated that 45% of Australians aged 16–85 years experienced a mental disorder at some point in their life. It should be noted that the surveys used different methodologies.

The Australian Institute of Health and Welfare (AIHW) in its report on Australia’s Health 2020 found that in 2015, mental and substance use disorders formed 12% of Australia’s total burden of disease, which is ‘defined as the combined loss of years of healthy life due to premature death (known as fatal burden) and living with ill health (known as non-fatal burden)’. This made mental and substance use disorders the fourth highest contributing disease group to total burden of disease and second highest non-fatal disease group contributing to total burden.

Suicide is often, but not always, associated with mental illness. According to the ABS, in 2020, 3,139 people died from suicide, down from 3,318 people in 2019. This represented 12.1 deaths per 100,000 people in 2020, down from 12.9 per 100,000 in 2019. More than 90% of people who died by suicide in 2020 had risk factors identified that included depression, substance use and abuse, and issues in spousal relationships.

2 Spending on mental health

The AIHW has estimated that spending on mental health-related services in Australia from all sources (government and non-government) was around $11 billion, or $431 per person, in 2019–20.

Of the $11 billion, $6.6 billion (60%) was funded by state and territory governments, with the Australian Government contributing $3.8 billion (35%), and private health and third-party insurance spending $584 million (5%).

AIHW estimated that in 2019–20, the Australian Government spent $1.4 billion, or $53 per person on Medicare-subsidised mental health-specific services, and $566 million, or $22 per person on subsidised mental health-related prescriptions under the Pharmaceutical Benefits Scheme and the Repatriation Pharmaceutical Benefits Scheme.

The Productivity Commission, in its 2020 inquiry into mental health, estimated that individual out-of-pocket expenses on healthcare and related expenses for mental illness and suicide amounted to $700 million in 2018–19 (Volume 1, p. 11). Given indirect and hidden costs (such as reduced capacity to work), this figure is likely higher.

3 Access to mental health services

General practitioners (GPs) provide an initial point of contact for many people seeking assistance with mental illness and are able to refer patients to specialised services through Mental Health Treatment Plans. Mental Health Treatment Plans currently entitle a person to Medicare rebates for up to 20 individual psychological appointments per calendar year. This is double the number of sessions covered prior to the COVID-19 pandemic, with the additional 10 sessions available until 30 June 2022.

Since 2019, additional support has been made available for those living with an eating disorder through Eating Disorder Management Plans (EDPs). These allow an individual to access up to 40 sessions of evidence-based psychological treatment in a 12-month period, as well as up to 20 dietetic services per 12-month period.

There are reported challenges related to access, including a mental health workforce that is concentrated in metropolitan Australia, out-of-pocket costs for treatment that may be prohibitive, and lengthy wait times to see psychiatrists and psychologists. Additionally, the ‘missing middle’ is increasingly acknowledged as an at-risk group, referring to those with complex mental illnesses whose needs are greater than what can be addressed by primary care, but who are considered ‘not sick enough’ to access specialist mental health services.

4 Government responsibility for mental health services

Responsibility for public funding of and regulating mental health services is shared between the Australian and state and territory governments, with their respective roles not always clear. The following table provides a broad outline of government responsibility for mental health services in Australia. Note that this table gives only a general overview of a complex system.

Table 1: Overview of division of responsibilities for mental health services

Australian Government

State and territory governments

• Leads national policy development, including through the National Mental Health and Suicide Prevention Plan

• Funds Primary Health Networks, which coordinate regional primary healthcare

• Leads and coordinates federal policy development, program design and service delivery for Aboriginal and Torres Strait Islanders

• Funds Veterans’ mental health services

• Co-funds public hospitals with state and territory governments

• Funds Medicare subsidies for consultation with GPs, specialists, psychologists and other allied health professionals

• Funds subsidised prescriptions through the Pharmaceutical Benefits Scheme and the Repatriation Pharmaceutical Benefits Scheme

• Co-funds helplines and mental health crisis and support services

• With the states and territories, co-funds the National Disability Insurance Scheme (NDIS), which provides funding for individualised support for eligible people with psychosocial disability

• Provides some clinical and non-clinical community-based mental healthcare (for example, Adult Mental Health Centres) and funds some initiatives delivered by non-government organisations (for example, Headspace)

• Through state and territory mental health commissions, focus on strategy and community engagement, set performance standards and coordinate government action across portfolios (varies by jurisdiction)*

• Set legislative, regulatory and policy frameworks for mental health service delivery within their respective jurisdictions

• Co-fund public hospitals (with the federal government)

• Administer and deliver hospital and emergency services

• Fund, deliver and manage specialised community mental health care services (including community-based ambulatory care, outpatient services and day clinics) and community-based residential care

• Co-fund national hotlines and mental health crisis and support services, and fund and provide state-based mental health hotlines

• With the Australian Government, co-fund the NDIS

Sources: Productivity Commission, Mental Health – Volume 3, no. 95, (Canberra, June 2020), 1080–1082; Productivity Commission, Report on Government Services 2021: 13 Services for Mental Health: Roles and Responsibilities, (Canberra, January 2021); AIHW, Mental Health Services in Australia, (Canberra, 14 October 2021); AIHW, Community Mental Health Care Services 2019-20 Section, (Canberra, October 2021), 1; National Mental Health Commission, Fifth National Mental Health and Suicide Prevention Plan, (Sydney, 2017), 9.

*Not all states and territories have mental health commissions

5 Mental health workforce

Aside from GPs, other professionals working in the mental health sector include psychiatrists, mental health nurses and allied health professionals, such as psychologists, social workers and occupational therapists.

According to the AIHW, in 2019 there were 3,615 psychiatrists, 24,111 mental health nurses, and 28,412 psychologists employed in Australia, the vast majority of whom work in major cities. A 2018 Senate inquiry into the Accessibility and quality of mental health services in rural and remote Australia noted significant challenges in the provision of qualified mental health professionals in rural and remote areas. These challenges included the availability of housing, uncertainty caused by short-term funding cycles, low remuneration packages, and fewer opportunities for professional development.

As of early 2022, the Australian Government was in the process of developing a 10-year National Mental Health Workforce Strategy. It is expected that this Strategy will consider the sustainability, retention, training and equitable distribution of the mental health workforce. A final strategy was yet to be released as of May 2022.

6 Recent and anticipated policy developments

Governments at all levels have shown interest in increasing funding and improving mental health services over recent years. The following section outlines some of the key recent and anticipated policy developments at the national level.

National Mental Health and Suicide Prevention Plan

In response to the Productivity Commission’s 2020 inquiry into mental health and final advice provided by the National Suicide Prevention Adviser, the Australian Government released a National Mental Health and Suicide Prevention Plan in 2021. As well as outlining that an agreement would be reached with the state and territory governments (outlined below), the announcement committed an additional $2.3 billion of funding over 4 years from 2021–22, to be spread across 5 pillars:

• $248.6 million for prevention and early intervention

• $298.2 million for suicide prevention

• $1.4 billion for treatment

• $107.0 million for supporting the vulnerable

• $202.0 million for workforce and governance.

National Agreement on Mental Health and Suicide Prevention

The National Agreement on Mental Health and Suicide Prevention came into effect in March 2022. The Agreement is designed to: clarify federal and jurisdictional roles and responsibilities; progress improvements in mental health services; establish collaborative approaches to monitoring and evaluation; reduce system gaps; expand and enhance the workforce; and work to improve mental health and suicide prevention. It is supplemented by individual bilateral agreements with the states and territories.

National Children’s Mental Health and Wellbeing Strategy

The National Children’s Mental Health and Wellbeing Strategy was launched in October 2021. Relevant to children from birth to 12 years of age, the Strategy is based on 4 focus areas: family and community; service system; education settings; and evidence and evaluation.

Underpinning the Strategy are 8 guiding principles: child-centred; strengths-based; prevention-focused; equity and access; universal system; evidence-informed best practice and continuous quality evaluation; early intervention; and needs-based, not diagnoses driven.

National Disaster Mental Health and Wellbeing Framework

As at early 2022, a National Disaster Mental Health and Wellbeing Framework was being developed by the National Mental Health Commission. The Framework will focus on providing mental health services during, and following, disasters. Work on this Framework forms part of the Australian Government’s $76 million Bushfire Mental Health Response Package, promised following the 2019–20 bushfires. The Framework was delivered to the Australian Government in October 2021. As of May 2022, the Framework had not been publicly released.

7 Interface with other systems

Mental health services are not limited to those available through the health system. Many people with mental illness also engage with other systems, such as education, the NDIS, aged care, the Department of Veterans’ Affairs, homelessness services, child protection systems and prisons. For example:

• eligible people who have a psychosocial disability are able to access individualised funding through the NDIS for therapies and particular forms of support to address the functional impacts of their psychosocial disability on their everyday lives. However, some questions have been raised about the difficulties of accessing the NDIS for people with severe mental illness

• the Royal Commission into Aged Care Quality and Safety heard evidence that people receiving aged care services do not have access to the mental health services they need. One hearing heard concerns that the high prevalence of depression among those living in permanent residential aged care is compounded by inadequate treatment and an ill-equipped aged care workforce. In addition, people living in residential care may be ineligible for, or have difficulty accessing, Medicare-subsidised specialist mental health services

• current and former members of the Australian Defence Force are eligible for free mental healthcare using a Veteran White Card or a Veteran Gold Card, whether or not their mental health condition is related to their service. Family members of veterans are also able to access some additional services. A report by the interim National Commissioner for Defence and Veteran Suicide Prevention in September 2021 reported significantly higher rates of suicide among ex-serving Australians, an issue now being investigated by the Royal Commission into Defence and Veteran Suicide

• children involved with child protection services are significantly more likely to be diagnosed with mental health conditions than children unknown to the child protection system, with those placed in out-of-home care 5 times more likely to be diagnosed with a mental illness than those not known to child protection services. The Department of Social Services funds Family Mental Health Support Services, which offer assistance to children at risk of, or experiencing, a mental illness, and prioritise vulnerable children, including those in contact with child protection services

• mental illness is a key risk factor for homelessness, but homelessness can also increase the risk of mental illness. The AIHW reported that 32% of people who accessed specialist homelessness services in 2020–21 had a current mental health condition. Additional data from AIHW suggests this figure may be higher, at 37%. The rate of mental health conditions among clients accessing specialist homelessness services is 7 times higher for Aboriginal and Torres Strait Islander peoples than non-Indigenous Australians.

• people in prisons experience higher rates of mental illness than the general population, with 40% of prison entrants surveyed in 2018 reporting that they had been told they had a mental health condition at some point during their lives.

8 The impact of the COVID-19 pandemic on mental health

Mental health considerations have come to the fore during the COVID-19 pandemic, as people have experienced lockdowns and physical isolation, as well as disruptions to employment and schooling. The full impact of the pandemic on people’s mental health is still emerging.

Crisis helplines have reported substantial increases in the volume of calls in 2020 and 2021, compared to 2019. The AIHW reported that in the 4 weeks to 9 January 2022, Lifeline answered 77,156 calls, which represented a 21.7% increase from the same period 2 years earlier. The Australian Psychological Society in November 2021 reported ‘unprecedented demand’ for mental health services, finding that 1 in 5 members had to close their books to new clients—a twentyfold increase on pre-pandemic figures.

Some of the mental health-specific responses introduced by the Australian Government and states and territories include:

• the National Mental Health and Wellbeing Pandemic Response Plan was released in May 2020, with $48.1 million in funding. The Plan has 3 aims: monitor and predict the impact of the pandemic; reach people in the community; and provide clear pathways of care through improved service linkage and coordination

• a further 10 individual sessions of subsidised psychological therapy, through the Better Access initiative until 30 June 2022, for those with a mental health plan who are experiencing distress due to the pandemic. This doubles the number previously available

• Head to Health Pop up services in NSW, Victoria and the ACT, providing an emergency response to the pandemic, plus additional HeadtoHelp clinics in Victoria.

The importance of telehealth services during the pandemic has been highlighted by the AIHW, who reported that between 16 March 2020 and 19 September 2021, about 29% of the 21 million Medicare Benefits Scheme mental health-related services processed nationally were delivered via telehealth. This amounted to $714.3 million in benefits paid for MBS mental health-related telehealth services. Modified telehealth arrangements are now a permanent feature of the Australian healthcare system, with the Australian Government providing $106 million over 4 years to support their continuation. Telehealth options may offer greater flexibility for those seeking access to healthcare, including mental health support.

© Commonwealth of Australia

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.