Mental health worker compensation claims set to double by 2030 as workers face burnout

Worker compensation claims for mental health conditions have tripled in the past 20 years, according to a report released this morning.

The associated costs are predicted to further double by 2030. The medium amount of compensation claims climbed to $45,900 from 2018 to 2019, compared to $14,300 from 2000 to 2001.

At the same time, serious worker compensation claims have decreased by 13% in that same period thanks to a reduction in physical injuries.

While businesses are struggling to recruit staff, coupled with low wages and high inflation putting pressure on employees and causing burnout, experts warn it’s not the whole story.

Australians are overworked, underpaid and burnt out

Australians are working harder than ever, thanks to high inflation and low unemployment, workplace and discrimination representative Gary Pinchen tells Crikey. 

“If you can’t get other workers, [employers] push their existing workforce even harder or get them to work more hours,” he said. Inflation also means employers are seeking “better bang for their buck”. 

This has led to an increase in unpaid overtime, with Australians working 3.3 billion extra unpaid hours a year. That’s an increase of an average of 6.1 hours a week, up from 5.3 hours in 2020, averaging eight weeks of unpaid work per worker per year, equating to $125 billion of lost income. 

Coupled with COVID-19, which saw workers’ hours blend as they worked from home while juggling homeschooling children, caring roles and general life admin, employees and employers are burnt out. There are higher levels of burnout in Australia than in other countries, with 62% of employees and 66% of managers reporting they feel burnt out at work, compared with a global average of 48% and 53%, according to Microsoft’s latest Work Trends Index. 

It’s not all down to mental health

But Mark Wooden, professorial fellow at the Melbourne Institute of Applied Economic and Social Research, told Crikey the trend simply represented a shift in the kinds of injuries as job profiles changed. While 50 years ago physical injury claims were the most common, this changed to repetitive strain injury in the 1980s, and now recently to mental stress injuries, he said, as mental health became better understood.

Since 2000, the number of serious claims lodged with Safe Work Australia has decreased from 133,000 to 115,000. From 2019 to 2020, there were more than 10,000 claims for “mental stress”, while mental health conditions accounted for 69% of disease claims and 9% of claims overall. 

Wooden doesn’t believe burnout is a root cause: “We’re working less on average than were 20 years ago,” he said, adding the current inflation and unemployment levels were new and unique. 

It also means workers can leave to find better employment — though there hasn’t been a surge in people leaving their jobs. Job mobility hit its highest rate since 2012 earlier this year, with 9.5% of people changing jobs between February 2021-22. But it’s only 2% higher than the record low of 7.5% reached during the first year of the pandemic.

Getting a compensation claim isn’t easy

Despite the increase in payouts, getting a mental health claim approved isn’t easy. The Productivity Commission estimated up to 60% of claims are rejected, compared to just 10% of non-mental health claims. Most claims are linked to work pressure, followed by workplace harassment or bullying.  

Pinchen said while under-the-pump GPs issued certificates of capacity for time off for those pursuing mental health claims, getting a payout was difficult. The increase in payout sums was likely due to increased lawyer fees, he said.

Employers also have plenty of tactics to make getting compensation difficult, from setting mandatory healthcare and rehabilitation appointments in difficult-to-reach places or linking mental stress to anything happening in one’s personal life.

“It’s not as easy as proving a physical injury like a missing toe,” he said.

 A worker’s compensation claim can also be a burden, he warned, especially when looking for new work: “It will follow you for life.”