Mental Health and What’s At Stake

Chronic stress is one of the leading causes of workers’ compensation claims across Australia. Mental health conditions now account for 12% of all serious workers’ compensation claims — up from 6.5% a decade ago — and claims for mental health conditions rose by 161.1% in the decade to 2023–24 (Safe Work Australia, Key Work Health and Safety Statistics 2025). These direct costs combine with indirect ones, such as lost productivity.

Another indirect cost of long-term stress is physical illness. Chronic stress is associated with a weakened immune system, and can affect sleep, energy and overall wellbeing over time.

The stress hormone cortisol wakes you up in the morning and is released in response to danger. It’s important to distinguish between your body’s natural chemical response to short-term threats (which spike and then calm down afterwards), and the consequences of years of elevated stress levels.

Some of these consequences involve mental health, such as depression and anxiety. The median time off work for a mental health claim is 35.7 weeks — nearly five times the median for all serious claims — and the median compensation paid is $67,400, significantly higher than for physical injury claims (Safe Work Australia, Key Work Health and Safety Statistics 2025).

Since 1 April 2023, Australian employers have also been required under amended Work Health and Safety Regulations to proactively identify, assess and control psychosocial hazards using higher-order controls — work design, supervision, training and culture — not just awareness programs or an EAP alone (Safe Work Australia, Model Code of Practice: Managing Psychosocial Hazards at Work).

The good news: a comprehensive approach that combines organisational risk management with practical support — such as exercise, healthy eating, mindfulness and social connection — can help lower workplace stress levels.

Companies can reduce psychosocial risk and workers compensation claims by implementing Workplace Health and Wellbeing Programs that teach employees a range of healthy living skills, including:

Call HSG now to discuss how we can tailor a Workplace Health and Wellbeing Program to suit your circumstances.