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Open Access Research article

The personal and national costs of mental health conditions: impacts on income, taxes, government support payments due to lost labour force participation

Deborah J Schofield1*, Rupendra N Shrestha2, Richard Percival3, Megan E Passey4, Emily J Callander1 and Simon J Kelly3

Author Affiliations

1 NHMRC Clinical Trials Centre and School of Public Health, University of Sydney, Camperdown, NSW 1450, Australia

2 NHMRC Clinical Trials Centre, University of Sydney, Camperdown, NSW 1450, Australia

3 National Centre for Social and Economic Modelling, University of Canberra, Canberra, Australia

4 University Centre for Rural Health (North Coast), University of Sydney, Lismore, NSW 2480, Australia

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BMC Psychiatry 2011, 11:72  doi:10.1186/1471-244X-11-72

Published: 28 April 2011

Abstract

Background

Mental health conditions have the ability to interrupt an individual's ability to participate in the labour force, and this can have considerable follow on impacts to both the individual and the state.

Method

Cross-sectional analysis of the base population of Health&WealthMOD, a microsimulation model built on data from the Australian Bureau of Statistics' Survey of Disability, Ageing and Carers and STINMOD, an income and savings microsimulation model was used to quantify the personal cost of lost income and the cost to the state from lost income taxation, increased benefits payments and lost GDP as a result of early retirement due to mental health conditions in Australians aged 45-64 in 2009.

Results

Individuals aged 45 to 64 years who have retired early due to depression personally have 73% lower income then their full time employed counterparts and those retired early due to other mental health conditions have 78% lower incomes. The national aggregate cost to government due to early retirement from these conditions equated to $278 million (£152.9 million) in lost income taxation revenue, $407 million (£223.9 million) in additional transfer payments and around $1.7 billion in GDP in 2009 alone.

Conclusions

The costs of mental health conditions to the individuals and the state are considerable. While individuals has to bear the economic costs of lost income in addition to the burden of the conditions itself, the impact on the state is loss of productivity from reduced workforce participation, lost income taxation revenue, and increased government support payments - in addition to direct health care costs.