Mental illness can bring a massive paycut
Danny Rose, AAP From Sydney Morning Herald February 1, 2011
Mental illness can represent a massive pay cut, according to Australian research which has calculated its cost in forcing people to leave the workforce early.
The study found people who experienced depression or other mental health problems were up to $250,000 worse off, or they had around half the accumulated wealth, compared to their healthy peers around retirement age.
Professor Deborah Schofield said it showed how mental health problems had not only a major impact on a person’s wellbeing and family life but also on their career earnings – and so their level of independence in old age. “We expected to see a gap but not such a big gap,” said Prof Schofield, from the University of Sydney and who led the joint research effort with the University of Canberra.
“What it shows us is that if you do have mental illnesses your chances of being in the labour force are much, much lower and so, as a result, you have much less capacity to save.”
The research analysed a nationally representative sample of more than 8000 Australians aged between 45 and 64 years. They accessed each participant’s employment, income, and accumulated wealth in savings, property and other financial investments.
There were 99 participants who were found to have retired early due to debilitating mental health problems. Those with depression were found to have a mean value of $236,000 in wealth while those with other conditions – such as schizophrenia or an anxiety disorder – had just $148,000. This was compared to $398,000 accumulated by a worker who had no mental health or other chronic health problems.