Social disadvantage and individual vulnerability: A longitudinal investigation of welfare receipt and mental health in Australia

Objective: To examine longitudinal associations between mental health and welfare receipt among working-age Australians. Method: We analysed 9 years of data from 11,701 respondents (49% men) from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Mental health was assessed by the mental health subscale from the Short Form 36 questionnaire. Linear mixed models were used to examine the longitudinal associations between mental health and income support adjusting for the effects of demographic and socio-economic factors, physical health, lifestyle behaviours and financial stress. Within-person variation in welfare receipt over time was differentiated from between-person propensity to receive welfare payments. Random effect models tested the effects of income support transitions. Results: Socio-demographic and financial variables explained the association between mental health and income support for those receiving student and parenting payments. Overall, recipients of disability, unemployment and mature age payments had poorer mental health regardless of their personal, social and financial circumstances. In addition, those receiving unemployment and disability payments had even poorer mental health at the times that they were receiving income support relative to the times when they were not. The greatest reductions in mental health were associated with transitions to disability payments and parenting payments for single parents. Conclusions: The poor mental health of welfare recipients may limit their opportunities to gain work and participate in community life. In part, this seems to reflect their adverse social and personal circumstances. However, there remains evidence of a direct link between welfare receipt and poor mental health that could be due to factors such as welfare stigma or other adverse life events coinciding with welfare receipt for those receiving unemployment or disability payments. Understanding these factors is critical to inform the next stage of welfare reform.