The State Insurance Regulatory Authority (SIRA), together with icare and SafeWork NSW, has allocated $5.4 million to support the launch of Mentally Healthy Workplaces Australia (MHWA), a new national centre dedicated to advancing workplace mental health and wellbeing.
The funding positions SIRA as a founding partner among more than 40 organisations, with total initial commitments exceeding $58 million.
MHWA, which is being established by Monash University, will focus on developing a coordinated national approach to workplace mental health.
The centre’s mandate includes formulating a national strategy, conducting collaborative research, and rolling out evidence-based programs to improve psychological health and safety in Australian workplaces.
The centre’s partners have set a target to secure over $180 million in combined cash and in-kind contributions over a seven-year period.
According to the NSW Psychological Health and Safety Strategy 2024-26, psychologically unsafe workplaces in New South Wales alone are estimated to cost $2.8 billion each year. Mental health compensation claims in the state have climbed by 30% between 2018-19 and 2022-23.
MHWA’s initiatives are expected to help reduce absenteeism related to mental health by more than 5.5 million days and shorten the average duration of mental health-related leave from 27 weeks to 23 weeks.
SIRA’s involvement in MHWA reflects a broader commitment to improving workplace outcomes for both employers and employees.
The authority’s contribution is intended to support the adoption of best practices in workplace mental health and safety across Australia.
“SIRA is proud to work with icare and SafeWork on behalf of NSW government to partner in the establishment of this centre. By supporting MHWA and drawing from the best minds in research, we are building the foundations for better workplace outcomes,” said Mandy Young, SIRA chief executive.
The Insurance Council of Australia (ICA) has reported a marked increase in mental health conditions across the country, with government data showing that nearly half of Australians aged 16 to 85 have experienced a mental disorder.
The prevalence of mental health concerns among young adults has also risen over the past decade, which is reflected in insurance claims data.
Claims related to mental illness are increasing across several insurance lines, including workers’ compensation, compulsory third party (CTP), public liability, and life insurance.
“Mental illness has a profound impact on individuals and those close to them as well as on the community more broadly, putting pressure on health systems, workplaces, schools, and both statutory insurance classes (workers’ compensation and CTP) and broader commercial lines like public liability insurance,” the ICA said.
Mental health claims now represent a larger proportion of life insurance payouts, rising from 25% in 2019 to 44% in 2024. States such as Victoria and New South Wales have reported significant growth in psychological injury claims, both in terms of frequency and cost.
The ICA has highlighted that rising claims costs are contributing to higher insurance premiums, which adds to the financial challenges faced by consumers.
The ICA’s submission to the Productivity Commission’s Interim Report on “Delivering Quality Care More Efficiently” estimates that mental health issues cost the Australian economy more than $200 billion annually. This figure includes lost productivity, increased absenteeism, and higher insurance claims.
In Victoria, the annual cost of poor mental health is estimated at $14.2 billion, with a significant portion attributed to workplace-related impacts such as lost productivity and injury-related expenses.
The data suggests that unresolved mental health concerns can lead to substantial productivity losses, with employees experiencing depression missing an average of more than a month of work each year.
