Expenditure on mental health-related services

Spending on mental health-related services increased from $9.3 billion in 2016-17 to $11.6 billion in 2020-21.

Almost $1.6 billion was spent on mental health-related Medicare services and $635 million on mental health-related prescriptions in 2021-22.

$7 billion was spent on state and territory mental health services in 2020-21.

Please note throughout this section, all health expenditure (unless otherwise specified) utilises constant prices, also referred to as ‘in real terms’. Constant price estimates are derived by adjusting the current price to remove the effects of inflation and allows for spending in different years to be compared and for changes in spending to reflect changes in the volume of health goods and services


This section reviews the available information on recurrent expenditure (running costs) health expenditure (what was spent) and health funding (funding provided and who provided the funds) for mental health-related services in Australia. These are distinct but related concepts essential to understanding the financial management of the health system.

The COVID-19 pandemic has had a number of impacts on the Australian health system, including increasing expenditure both in the system overall and specifically for mental health related care. Overall, the mental health proportion of total health expenditure decreased in 2020–21 (7% in 2020–21 from 8% in 2019–20) despite mental health-related expenditure increasing from about $10.5 billion in 2019–20 to about $11 billion in 2020–21. Health system responses, such as increased use of personal protective equipment, increased cleaning schedules and expansion of telehealth arrangements have also impacted expenditure. For example, the Australian Government introduced a wide range of additions to the Medicare Benefit Schedule (MBS) to support the provision of care via telehealth, expanding the items included in the MBS and increasing the expenditure from about $1.4 billion in 2019–20 to about $1.6 billion in 2020–21. Caution should be exercised when making time series analysis that include the 2020–21 period.

In 2020–21, national recurrent spending on mental health-related services was estimated to be $11.6 billion; an annual average increase of almost 6% since 2016–17, in real terms (i.e. adjusted for inflation). Overall, national spending increased from $418 per person in 2016–17 to $451 per person during 2020–21; an average annual increase of 2%, in real terms.

In 2020–21 state and territory governments spent 60% ($7 billion), the Australian Government 35% ($4 billion), and private health insurance funds and other third-party insurers 5% ($0.6 billion) of recurrent expenditure.

Australian Government spending increased by an average annual rate of 4% between 2016–17 and 2020–21, state and territory government spending increased by an average annual rate of 3% in real terms. Data on expenditure and funding, calculated in both current and constant prices, are derived from a variety of sources, as outlined in the data source section.

Spotlight data: Overview of mental health expenditure, 2016–17 to 2020–21

Spotlight figure displays an overview of mental health expenditure on mental health services nationally and for states and territories between 2016–17 and 2020–21.

Visualisation not available for printing

Note: Data not published will appear as '0'. Refer to data tables for further details.

Source: Expenditure on mental health services tables.

How much was spent on specialised mental health services?

Spending on state and territory specialised mental health services increased from $6.3 billion in 2016–17 to $7 billion in 2020–21 (in real terms). The largest components were community mental health care services ($2.7 billion) and public acute hospitals with a specialist psychiatric unit or ward ($2.4 billion). Other spending included public psychiatric hospitals ($0.6 billion), grants to non-government organisations ($0.5 billion) and residential mental health services ($0.4 billion).

Figure EXP.1: Recurrent spending ($) per capita on state and territory specialised mental health services, constant prices, 2011–12 to 2020–21

Stacked area chart showing the per capita spending on specialised mental health services from 2011–12 to 2020–21 and 1992–93 to 2020–21. Public psychiatric hospital spending has decreased over the period. Spending increased for specialised psychiatric units of wards in public hospitals, community mental health care services, residential mental health services, grants to non-government-organisations and other indirect expenditure. Refer to Table EXP.4.

Sources: Australian Government Department of Health and Aged Care, National Survey of Mental Health Services Database (1992–93 to 2004–05), National Mental Health Establishments Database (2005–06 onwards); Table EXP.4.

Who funds specialised mental health services?

In 2020–21, the majority (97% or $6.8 billion of the $7 billion total cost) of funding for state and territory specialised mental health services was through state or territory governments. However, this estimate does not consider Australian Government payments to jurisdictions for the running of public hospital services, including the community-based services managed by public hospitals. Refer to the data source section for technical information regarding Australian Government expenditure.

Public sector specialised mental health hospital services

The $3 billion of spending on public sector specialised mental health hospital services during 2020–21 equates to an average cost per patient day of $1,306. The Northern Territory ($1,929) had the highest average cost per patient day and Queensland ($1,157) the lowest.

Spending can be further described using target population (General, Child and adolescent, Youth, Older person and Forensic target groups), program type (acute and non-acute) or a combination of these.

Private hospital specialised mental health services

In 2020–21, a total of around $815 million was spent on specialised mental health services provided by private hospitals. The non-Commonwealth sourced component of this revenue was $608 million. In real terms, this represents an annual average increase from 2016–17 of 4% and 5% respectively. Total recurrent expenditure on specialised mental health services in private hospitals has not been available since 2017–18 due to changes in data collection availability.

Australian Government expenditure on mental health-related services

Australian Government spending on mental health-related services was estimated to be $4 billion in 2020–21. However, as noted previously and detailed in the data source section of this report, there are other known Australian Government outlays attributable to supporting mental health issues not included in this estimate.

Australian Government spending on mental health-related services increased by an average annual rate of 4% between 2016–17 and 2020–21, in real terms; an increase from $141 per person in 2016–17 to $157 in 2020–21. Spending through Medicare on psychologists and allied health, and national programs and initiatives managed by the Department of Health and Aged Care had the largest increases per person between 2016–17 and 2020–21, by $6.60 and $5.90 respectively, in real terms. National programs and initiatives managed by the Department of Social Services (DSS) decreased by $10.40 per person during this time.

Spending on Medicare-subsidised mental health-specific services and mental health-related medications provided through the Pharmaceutical Benefits Scheme (PBS) accounted for 54% of the total Australian Government spending in 2020–21 (Figure EXP.2). This was followed by:

  • National programs and initiatives managed by the Department of Health and Aged Care (24%)
  • the Department of Veterans’ Affairs (7%)
  • Private Health Insurance Premium Rebates (4%)
  • National Suicide Prevention Program (2%).

Figure EXP.2: Australian Government spending ($) per capita, on mental health-related services, constant prices, 2011–12 to 2020–21

Stacked area chart showing the per capita spending by the Australian Government on specialised mental health services between 2011-12 to 2020-21 and 1992–93 and 2020–21. Expenditure increased for Mental health specific payments to states and territories, National programs and initiatives, the National Mental Health Commission and private health insurance premium rebates. Expenditure decreased for the Pharmaceuticals Benefit Scheme and research. Refer to Table EXP.31.

Note: National programs and initiatives include programs managed by the Department of Health and Aged Care (DHAC), programs managed by DSS, programs managed by the Department of Veterans’ Affairs (DVA), the Department of Defence (DoD) funded programs, Indigenous social and emotional wellbeing programs, National Suicide Prevention Program.

Source: Australian Government Department of Health and Aged Care (unpublished); Table EXP.31

Australian Government spending on Department of Defence funded mental health programs showed an average annual increase of 4% between 2016–17 ($52.7 million) and 2020–21 ($60.7 million), in real terms. This spending covers a range of mental health programs and services delivered to Australian Defence Force (ADF) personnel. When the number of permanent ADF personnel is taken into consideration (59,569 people; Department of Defence 2021) this equates to about $1,018 per permanent ADF member in 2020–21.

Australian Government expenditure on Medicare-subsidised mental health-specific services

Medicare-subsidised mental health-specific services refers to the mental health-specific services subsidised by the Australian Government through the Medicare Benefit Schedule (MBS). These services include mental health-specific services provided by psychiatrists, general practitioners (GPs), psychologists and other allied health professionals and are defined in the MBS. Refer to the data source section for further information on the estimation of GP spending prior to 2007–08.

In 2021–22, almost $1.6 billion was paid in benefits for Medicare-subsidised mental health-specific services, equating to 5% of total spending ($29.1 billion – including Dental Benefits Schedule and the Child Dental Benefits Schedule) (SA 2022). Spending for services by psychologists ($769 million or 49%) was the largest proportion, comprising mostly psychological therapy services (clinical psychologists; $420 million) and focussed psychological strategies (other psychologists; $349 million).

Nationally, spending on Medicare-subsidised mental health-specific services increased from an average of $53 per person in 2017–18 to $60 in 2021–22, an average annual increase of 3% (in real terms) (Figure EXP.3). The average benefits paid per person ranged from $69 (Victoria) to $20 (NT).

Figure EXP.3: Australian Government spending ($) per capita on Medicare-subsidised mental health-specific services, 2021–22

Stacked vertical bar chart showing the Australian Government per capita expenditure on Medicare-subsidised mental health-specific services by provider type and states and territories in 2019–20. There was no consistent trend across the states and territories as to which provider had the highest per capita expenditure, with psychiatrists, clinical psychologists and general practitioners all having the highest per capita expenditure in at least one state or territory. Per capita expenditure for Other allied health was the lowest of all providers in every state and territory.

Note: ‘Clinical psychologist’ refers to psychological therapy services provided by a clinical psychologist, and ‘Other psychologist’ includes other psychology services involving clinical psychologists and other psychologists.

Source: Medicare Benefits Schedule data; Table EXP.20.

Australian Government expenditure on mental health-related subsidised prescriptions

In 2021–22, Australian Government spending on mental health-related subsidised prescriptions under the PBS and RPBS was $635 million, or $24 per person. This equates to 4% of all Australian Government spending on PBS/RPBS ($14.8  billion) (SA 2022). Prescriptions for antipsychotics (44%) and antidepressants (34%) accounted for the majority spending in 2021–22.

Spending on PBS/RPBS medications ranged from $31 per person (Tasmania) to $15 (NT) (Figure EXP.4). For most states and territories, the spending on antipsychotics was the largest proportion of PBS/RPBS spending, followed by antidepressants.  

Figure EXP.4: Australian Government spending ($) per capita, mental health-related medications subsidised under the PBS/RPBS, by type of medication prescribed, 2021–22

Stacked vertical bar chart showing the Australian Government per capita expenditure on mental health-related medications subsidised under the PBS/RPBS by type of medication prescribed and states and territories in 2021–22. The highest per capita spend was on Antipsychotics in all states and territories, except for Tasmania where Antidepressants was the highest. Hypnotics and sedatives had the lowest per capita spend across all states and territories. Refer to Table EXP.28.

Source: Pharmaceutical Benefits Scheme data; Table EXP.28.

Around two-thirds (67% or $426 million) of spending on mental health-related subsidised prescriptions was for prescriptions issued by GPs.

In real terms , spending on mental health-related prescriptions increased between 2017–18 and 2021–22, from $549 million to $630 million. The subsidised and total number of mental health-related prescriptions grew at annual average rates of about 4% per year respectively over this period (refer to table PBS.3). Medication prices can change for a variety of reasons (for example, Price Disclosure);  refer to the Mental health-related prescriptions section for more information.

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Key concepts

Key concept Description
Average cost per patient day

Average cost per patient day is determined by dividing the total recurrent expenditure of the specialised mental health service by the total number of patient days as presented in the Specialised mental health care facilities section.

Constant price

Constant price estimates are derived by adjusting the current prices to remove the effects of inflation. This allows for expenditures in different years to be compared and for changes in expenditure to reflect changes in the volume of health goods and services. Generally, the constant price estimates have been derived using annually re-weighted chain price indexes produced by the Australian Bureau of Statistics (ABS). In some cases, such indexes are not available, and ABS implicit price deflators have been used instead (AIHW 2022). 

Current price

Current price refers to expenditures reported for a particular year, unadjusted for inflation. Changes in current price expenditure reflect changes in both price and volume (AIHW 2022). 

Health expenditure

Health expenditure is reported in terms of who incurs the expenditure rather than who ultimately provides the funding. In the case of public hospital care, for example, all expenditures (that is, expenditure on medical and surgical supplies, drugs, salaries of doctors and nurses, and so forth) are incurred by the states and territories, but a proportion of those expenditures are funded by transfers from the Australian Government (AIHW 2022). 

Health funding

Health funding is reported in terms of who provides the funds that are used to pay for health expenditure. In the case of public hospital care, for example, the Australian Government and the states and territories together provide over 90% of the funding; these funds are derived ultimately from taxation and other sources of government revenue. Some other funding comes from private health insurers and from individuals who choose to be treated as private patients and pay hospital fees out of their own pockets (AIHW 2022). The national recurrent expenditure on all mental health-related services can be estimated by combining funding from 3 sources:

  • state and territory contributions to specialised mental health services,
  • Australian government expenditure on mental health-related services and contributions to specialised mental health services, and
  • private health insurance fund component estimated by the Department of Health and Aged Care. 
Patient days

Patient days are days of admitted patient care provided to admitted patients in public psychiatric hospitals or specialised psychiatric units or wards in public acute hospitals and in residential mental health services. The total number of patient days is reported by specialised mental health service units. For consistency in data reporting, the following patient day data collection guidelines apply: admission and separation on the same day equals 1 day; all days are counted during a period of admission except for the day of separation; and leave days are excluded from the total. Note that the number of patient days reported to the National Mental Health Establishments Database is not directly comparable with the number of patient days reported either to the National Hospital Morbidity Database (Admitted patients mental health-related care) or the number of residential care days reported to the National Residential Mental Health Care Database (Residential mental health care services section)

Program type

Public sector specialised mental health hospital services can be categorised based on program type, which describes the principal purpose(s) of the program rather than the classification of the individual patients. Acute care admitted patient programs involve short‑term treatment for individuals with acute episodes of a mental disorder, characterised by recent onset of severe clinical symptoms that have the potential for prolonged dysfunction or risk to self and/or others. Non‑acute care refers to all other admitted patient programs, including rehabilitation and extended care services (refer to METEOR identifier 288889).

Recurrent expenditure

Recurrent expenditure refers to expenditure that does not result in the acquisition or enhancement of an asset—for example, salaries and wages expenditure and non‑salary expenditure such as payments to visiting medical officers (AIHW 2022). 

Specialised mental health services

Services with a primary function to provide treatment, rehabilitation or community health support targeted towards people with a mental disorder or psychiatric disability.

Target population

Some specialised mental health services data are categorised using 5 target population groups (refer METEOR identifier 682403):

  • Child and adolescent services focus on those aged under 18 years.
  • Youth services focus on those aged 16–24 years.
  • Older person programs focus on those aged 65 years and over.
  • Forensic health services provide services primarily for people whose health condition has led them to commit, or be suspected of, a criminal offence or make it likely that they will reoffend without adequate treatment or containment.
  • General programs provide services to the adult population, aged 18 to 64, however, these services may also provide assistance to children, adolescents or older people.

Note that, in some states, specialised mental health beds for aged persons are jointly funded by the Australian and state and territory governments. However, not all states or territories report such jointly funded beds through the National Mental Health Establishments Database.

Data coverage includes the time period 1992–93 to 2020–21. Australian Government Medicare expenditure and mental health-related medications subsidised under the PBS and RPBS expenditure data for 2020–21 in this section were last updated in April 2023.