Massive surge in TPD claims for mental health among 30-40yos

New research commissioned by the Council of Australian Life Insurers (CALI) has revealed a large spike in the number of 30-to-40-year-olds submitting Total and Permanent Disability (TPD) claims for mental health reasons in the last 10 years.

The report compiled by KPMG, Australia’s Mental Health Check Up, found there had been a 732 per cent rise in permanent disability claims amongst the selected age cohort, with 36 per cent of these now attributed to mental health conditions – compared to 10.1 per cent recorded back in 2013.

Men were also 59 per cent more likely to permanently leave the workforce due to mental health, and this also seemed to be occurring earlier in life – the average age of people who claimed in 2013 was 48.8 years old; in 2022, this had come down to 46.5 years.

“The unprecedented number of people leaving the workforce permanently in the prime of their working life has huge implications for them personally, for their loved ones, for our national economy and for our already stretched government support systems,” CALI CEO, Christine Cupitt, said.

“These are very concerning generational trends that show the frequency and severity of mental ill-health is rising exponentially in our community. No one wants this to be their story.

“We’re helping people every day and will continue to sustainably play our part. Australia’s life insurers are investing more than ever in this kind of data so we can share it with the community and show just how significant the impacts of mental ill-health are on Australians from all walks of life.”

According to the report, white collar workers were also seven per cent more likely to claim permanent disability and 14 per cent more likely to claim temporary disability due to ill mental health when compared to blue collar workers.

“The significant rise in mental health conditions over the past decade is a real concern for the community and this is reflected in the life insurance data shown in our report,” KPMG Partner and report author, Briallen Cummings, said.

“We see not only an increase in the overall proportion of people experiencing mental health conditions, but also an increase in the severity of those conditions.”

The report also indicated that mental health accounted for 80 per cent of the increase in the permanent disability claims rate across the last decade and has jumped by close to 10 per cent annually, while the rate for other physical causes to claim has only risen by 0.5 per cent year-on-year.

Cupitt raised concerns that this surge in permanent mental health claims could have a “flow on effect on the affordability of life insurance and the ability of insurers to provide meaningful cover”.

“This is far bigger than us. While governments are already thinking seriously about Australians’ mental health, we now have further evidence that our community needs more including a stronger and earlier safety net to keep people from falling through the cracks,” she said.

“This can’t just be left to private industry to manage once people are at the end of the road. No one wants to find themselves severely unwell with no other option than to make the life changing decision to leave the workforce permanently.”