Protecting mental health during periods of financial stress: Evidence from the Australian Coronavirus Supplement income support payment

Melbourne Institute Working Paper No. 31/21

Date: December 2021


Ferdi Botha
Peter Butterworth
Roger Wilkins


This paper investigates whether the Australian government’s Coronavirus Supplement, a temporary income support payment for unemployed jobseekers during the height of the COVID-19 pandemic, protected mental health by lowering financial stress. We use unique nationally representative data on 3,843 Australian adults over the period 6 April 2020 to 10 May 2021. We find that the Coronavirus Supplement payment significantly reduced reported financial stress, and lower financial stress was associated with lower mental distress. The Coronavirus Supplement was successful in protecting community mental health, indirectly through its effect of reducing financial stress. The findings provide support for temporary income support packages to protect mental health during periods of increased financial stress.

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  • Mental health, financial stress, Coronavirus, income support, Australia