The Growing Divide: Income Inequities in Access to Mental Healthcare in Australia

Nicole Black (), Danusha Jayawardana (), David W. Johnston () and Trong-Anh Trinh ()
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Nicole Black: Centre for Health Economics, Monash Business School, Monash University
Danusha Jayawardana: Centre for Health Economics, Monash Business School, Monash University
David W. Johnston: Centre for Health Economics, Monash Business School, Monash University
Trong-Anh Trinh: Centre for Health Economics, Monash Business School, Monash University

No 2025-13, Working Papers from Centre for Health Economics, Monash University

Abstract: Rising out-of-pocket costs for psychotherapy in Australia have heightened concerns about financial barriers to mental healthcare, particularly for lower-income households, who disproportionately experience psychological distress. Using nationwide linked administrative records of income and healthcare use, we estimate the magnitude of income-related inequity in psychotherapy use among 5.4 million individuals diagnosed with a mental health condition, and examine how such inequity has evolved over the decade from 2014 to 2023. Our findings show that income-related inequity is substantial, consistently higher among children than among adults, and has nearly doubled over the decade. By 2023, only 32% of low-income children and 40% of low-income adults accessed psychotherapy within three months of receiving a mental health treatment plan, compared with 55% among both high-income children and adults. We rule out changes in complexity of mental health disorders and the introduction of telehealth services as key drivers. We find no discernible difference by gender or age subgroups. Examination of antidepressant use reveals a growing gap in the opposite direction, with lower-income individuals increasingly reliant on medication without psychotherapy, relative to higher-income individuals. This suggests a shift towards lower-cost treatment pathways among disadvantaged groups. Our findings highlight the need for policies to address the increasing costs and other barriers to accessing psychotherapy, especially for lower-income households.

Keywords: mental health; income inequity; unmet mental health need; horizontal inequity (search for similar items in EconPapers)
JEL-codes: I12 I14 (search for similar items in EconPapers)
Date: 2025-08
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