FEATURE | Group insurance | Dusk to dawn

Australia is in the grips of an unprecedented mental health crisis.

It joins a league of other that anthropologist Joseph Henrich coins as "Western, Educated, Industrialised, Rich and Democratic" or "WEIRD" countries, grappling with the perfect storm of a medical, personal and social phenomenon.

Several studies and datasets reveal an unavoidable paradox: As a rich and 'lucky' country, Australia also boasts being one of the happiest places in the world, ranking 15^th in this year's World Happiness Report, but is hamstrung by how to manage this crisis as medication now appears to be the backbone of how Australia manages mental-health illnesses such as depression and anxiety. According to the OECD, Australia is the fifth-highest user of antidepressants behind Canada, the UK, Portugal and Iceland.

The Australian Institute of Health and Welfare (AIHW) states that antidepressants are the most dispensed mental-health medication in the country by a wide margin.

In 2024-25, antidepressants were dispensed to about 3.8 million people or roughly 14% of the population. This worked out to be 34.2 million scripts issued, accounting for 72% of all mental health-related prescriptions.

Overall, some 5.2 million Australians or 19% of the population received some type of mental health-related prescription that year, up from 16% the year before.

Females were more likely than males to have a prescription dispensed for antidepressants at 18% versus 10%.

A review in the Australian Journal of General Practice (AJGP), however, found many use antidepressants for longer periods and for less severe conditions - yet evidence justifying long-term use is "flawed" and their ability to prevent relapse is "exaggerated."

This presents another interesting paradox: usage keeps climbing but experts increasingly question whether more prescribing equals better mental-health outcomes. Is there another way to treat mental-health conditions with a prescription pad? Numerous studies back the effectiveness of psychological therapy or "talk therapy" and it deserves a rightful place in the conversation and treatment pathways.

Safety nets

Unseen levels of mental-health claims in the group insurance industry stand tantamount to the crisis at hand.

AIA Australia, an insurance partner for several super funds, recorded mental-health conditions comprised nearly one in three group insurance total and permanent disability (TPD) claims in 2025, making them the number one cause of claims.

Breaking this down further, mental health accounted for 25% of income protection claims for women and 19% for men.

Mental health claims also tend to occur earlier in members' lives compared to other illnesses or injuries: 45 years old on average for mental health-related TPD and income protection claims versus 50 years old for those with non-mental health-related claims.

It's happening across the board too. Mental health-related TPD total group insurance claims at TAL jumped by 60% in the three years to 2025, compared to 20% growth across other claim causes. At Colonial First State, mental-health conditions account for nearly 30% of total TPD and income protection - the leading cause of claims across both benefit types.

One top priority for the sector is to nut out how TPD and income protection can be redesigned around recovery and return-to-work pathways and what a better model looks like.

AIA Australia chief executive Damien Mu says the current model "can be quite reactive", with IP often starting after a member has been away from work for some time while TPD is generally assessed when it appears a claimed condition will be permanent.

"A stronger model would support earlier intervention, rehabilitation and clearer pathways to help members stay connected to work where possible, while still providing strong financial protection when they genuinely cannot return," he explains.

"For income protection, there should continue to be a strong focus on providing support early, before a claim becomes prolonged. Building stronger engagement with employers, access to rehabilitation support, partial capacity benefits and structured return-to-work payments can all play an important role in helping members rebuild capacity and return to suitable work over time."

For TPD, Mu says the benefit should provide a lump-sum safety net for members experiencing severe and permanent conditions.

However, there are opportunities to include more support during the assessment period, such as rehabilitation funding, interim support or return-to-work incentives for members who have a realistic capacity to return to suitable work.

This moves TPD away from being "an end-point decision and more of a pathway" that balances financial certainty with recovery and workforce participation where appropriate.

Commonwealth Superannuation Corporation (CSC) chief customer officer Adam Nettheim points to several forces that are driving increased mental-health related claims.

"Today, we're dealing with economic challenges, rising bills and uncertainty in the broader environment. People are under stress. It doesn't necessarily have to be about work; it can be everything else that's going on around them," he says.

Another is that people are more willing to talk about their mental health struggles.

"It's helped people share their experiences. Particularly on our military side, we've seen a number of people come forward and say, 'I've realised I'm not doing well' and they're okay talking about it now. Removing the taboo around mental health has been a massive positive," he says.

As part of his role, Nettheim helps members normalise mental health challenges.

CSC via its insurer AIA runs a range of programs, including AIA Embrace, a more holistic health program, and My Psychologist.

"Understanding that members have access to these services, often at little or no cost through their membership, is part of normalising support," Nettheim says.

"Through AIA, we've held workshops attended by hundreds of people to learn more about mental health issues, what they might be experiencing and how to think about those experiences."

The fund also works with SuperFriend, a long-term provider of mental health initiatives often delivered through employers.

Another offering is Pain Coach, a digital and telehealth chronic pain management service, which can also be accessed by people undergoing cancer treatment, for example, and experience discomfort, nausea and other side effects.

"What are some of the things you can do that don't necessarily result in relying on medication? A lot of people reach for a tablet, and sometimes that isn't ideal because you can become dependent on it," Nettheim says.

"How do you work through some of these challenges through the power of your mind as opposed to the power of pharmaceuticals?"

Several studies found effective treatment for mental-health conditions involves both psychological intervention and medication.

The AJGP found benefits from this combination, together with lifestyle interventions, such as nutrition, movement, sleep, stress management and substance cessation, have all been "efficacious and cost-effective therapies that improve mental health, physical health and quality of life."

Committing to a sense of purpose is also key to helping pull people forward. Taking the Australian Defence Force as an example, Nettheim has seen young people end up on a lifetime pension after being unable to perform their role due to illness, injury or mental health challenges. Some effectively retire at the age of 30. It begs the question: What do they do with the rest of their lives?

"People need purpose. They need things to do. That's why we've been exploring ways to help people return to some form of work. It may not be the work they originally trained for, but how do we help them retrain and develop new skills?" he says.

"We have some great examples of people who've done exactly that. They retrained, reskilled and found a new path. What we're trying to understand now is what characteristics those people who have successfully pivoted possess, and how do they differ from those who haven't been able to make that transition?"

Patchwork

The Council of Australian Life Insurers (CALI) mapped out 11 types of income support that include income protection, TPD, workers' compensation and superannuation.

It estimates 8.5 million people last year received some type of income support that amounted to $78.9 billion paid, of which 11% stemmed from life insurers. Across all income support types, mental health conditions lay at the heart, averaging 30% of claims.

CALI chief executive Christine Cupitt says: "Australia's mental health crisis is becoming a workforce participation and productivity crisis. And this is putting pressure on every part of our income support system."

"Australians should not have to become experts in 11 different income support systems just to get help when they are too sick or injured to work. No one wants to find themselves that unwell that they have no other option than to make the life-changing decision to leave the workforce permanently.

"The real question is how we support people earlier, before their condition becomes more complex and they lose connection to work. The best outcome for people is that they have a pathway to return to work when they are ready. We know that the longer someone is out of work, the less likely they are to return."

Zedd Wealth founder and senior financial adviser Zoe Kennedy caters to young accumulators in the Mackay region, providing goals-based advice largely to clients employed in the mining industry and spend extended periods away from home on rostered work schedules.

One common goal is to help them build enough financial security where they don't have to leave their family every second week.

"In Mackay, and from what I see in my community and among my friends, there's a big push around things like 'Talk to your mates' and R U OK? Day, which are great for encouraging people to start the conversation," she says. "But there seems to be far less guidance or awareness around what the next step is if someone does need help."

The claims Kennedy typically sees aren't income protection claims - rather TPD claims.

"It gets to the point where people are so burnt out and overwhelmed that they can't work anymore. That's when they make a claim," she notes.

"So, I guess the question is: what can we do to stop people getting to that point?"

Mu says there is a case for reviewing the wider disability and income support ecosystem - including the NDIS, workers' compensation, life insurance and other support schemes - to ensure people experiencing ill health can access the support they need as simply and efficiently as possible.

"Under the current system, people who are unable to work often have to navigate multiple processes, tell their story repeatedly, and undergo numerous medical assessments to demonstrate that they meet different eligibility and policy requirements for their respective claims. This can be stressful, time-consuming and frustrating at a time when they are already dealing with significant health challenges," he adds.

More government funding certainly won't hurt. But it is not the be-all, end-all. CALI is calling on the federal government to spearhead a connected and coordinated national approach to mental ill-health, workforce participation and income support.

This also goes beyond consulting with APRA. It would rope in the government, the healthcare sector, employers, workers' compensation schemes, as well as superannuation funds and insurers to be on a united front.

"Urgent coordinated action is needed to standardise definitions and data around mental health, streamline transitions between systems to reduce duplication and delays on people navigating support, and connect data systems so people who may benefit from tailored intervention can be identified earlier," says Cupitt.

Sliding scale

American writer and psychology lecturer Andrew Solomon eloquently details his lifelong battle with depression in the book The Noonday Demon, illustrating the mental-health condition as ranging from something "insipid" to "the stuff of breakdowns."

There are two models of depression, he writes, the dimensional and categorical.

"The dimensional posits that depression sits on a continuum with sadness and represents an extreme version of something everyone has felt and known.

"The categorical describes depression as an illness totally separate from indigestion. Both are true. You go along the gradual path or the sudden trigger of emotion and then you get to a place that is genuinely different."

With major depression, the "first thing that goes is happiness," Solomon says, marking this as the "cardinal symptom."

"You cannot gain pleasure from anything," he explains. Soon, other emotions follow happiness into oblivion: sadness, sense of humour, and one's belief in and capacity for love.

Depression is a condition that can be "unimaginable" to those who have not experienced it. Solomon does his best to articulate an illness that is as complex as the diagnosis itself with a series of metaphors. One of which is: "If one imagines a soul of iron that weathers with grief and rusts with mild depression, then major depression is the startling collapse of a whole structure."

What is more telling is that, given the many gray states between full-blown depression and a mild ache accompanied by changes in sleep, appetite, energy or interest, the cut-off point remains arbitrary.

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