Australia’s mental health gap is widening

Without the right help, people with psychosocial disability — functional impairments resulting from serious mental health challenges — are more likely to experience social isolation, poverty, homelessness, and discrimination. Yet most Australian adults with significant psychosocial disability miss out altogether on the psychosocial supports that could help them stay well, connected, and out of crisis.

Over time and with no deliberate policy intent, Australia has sleepwalked to a system where less than 70,000 NDIS packages now absorb nearly a third of all government spending on mental health-related supports, while far larger numbers of people needing help receive little or nothing.

Fewer than one in six adults with significant psychosocial disability receive any support through a non-NDIS program, and access to help varies widely across States. WA outperforms most States in terms of service availability, but still only a quarter of West Australian adults with significant psychosocial disability receive support from a non-NDIS program.

Australia’s Federal, State, and Territory governments spend about $12.6 billion each year on mental health services, excluding the NDIS. This funds support for millions of Australians living with mental health challenges, including State and Territory public mental health and hospital services, as well as Medicare and PBS expenditure by the Commonwealth. But very little of this funding goes to helping people with psychosocial disability.

The NDIS is by far the biggest funder of psychosocial services — last year the scheme spent more than $5.8b on supports for 66,000 eligible people with psychosocial disability through packages averaging about $90,000 per person per year.

Yet this leaves three quarters of adults with a significant psychosocial disability with no support at all.

Worse still, while the NDIS has delivered life-changing results for many thousands of Australians and their families, its design is not well suited to the distinct and episodic needs of people with psychosocial disability.

Nor is NDIS funding well structured to deliver the scheme’s own stated objective of supporting personal recovery for this group — helping people build meaningful lives, maintain housing or employment, and regain skills and independence.

Instead, many NDIS plans give priority to daily living assistance — cooking, cleaning, transport, and home-based support. These supports can be vital for people during periods of acute ill-health, but they do not help people regain independence over the longer term.

But currently, more than 80 per cent of NDIS spending on psychosocial disability goes on these supports rather than on evidence-based recovery-oriented supports.

At the same time, getting accepted into the NDIS is getting harder. Only one in four applicants with psychosocial disability is now accepted into the scheme — far lower than the rate for the scheme overall. People with significant psychosocial disability are seeking help from the NDIS, but most do not find it.

Current government mental health initiatives do not begin to close this gap. Like many reforms, the recently announced National Early Intervention Service is aimed at earlier, milder mental health concerns.

Far less policy attention and funding goes to people with the most complex mental health challenges. The upshot is that the people who need the most support are the least likely to get it.

This is untenable and unsustainable. The federal and state governments must ensure that finite funds are well used and that an appropriate range of supports is available to meet people’s needs inside and outside the NDIS.

Australia needs a more coherent approach: one where the NDIS provides supports for people with the most significant psychosocial disabilities, within a broader system of evidence-based services for other people who aren’t eligible.

Our report calls on governments to establish a new National Psychosocial Disability Program for adults with significant psychosocial disability who do not qualify for the NDIS.

The new program would expand community-based psychosocial supports across the country, improving access to support for people who need it most, while reducing pressure on the NDIS, public hospitals, and homelessness services.

Crucially, our analysis shows that governments can make this shift without spending new money. It can be done by rebalancing and better targeting what is currently spent: ensuring the NDIS provides the right support and making the billions spent on it go further to better meet the needs of Australians with psychosocial disability.