What if you're unable to work due to mental health issues?

Realising that work has become too hard because of your mental health can be deeply unsettling. You may be trying to keep functioning while feeling exhausted, anxious, flat, overwhelmed, or emotionally shut down.

At the same time, practical worries often move in quickly. How will you pay the bills? What happens to your job? How will you support the people who rely on you?

Many people feel caught between two difficult choices: keep pushing through while feeling worse, or leave and face financial uncertainty.

Mental health conditions such as anxiety, depression, PTSD, bipolar disorder, schizophrenia, obsessive compulsive disorder, burnout, and trauma-related stress can affect concentration, sleep, memory, motivation, and emotional resilience. For some people, symptoms build slowly over time. For others, they follow a difficult period at work, a personal crisis, or long-term stress.

If you’re in this position, it helps to know there are often more pathways available than it first seems. Leaving your job may be appropriate in some circumstances, but it isn’t always the first or only step.

According to the Australian Bureau of Statistics, 42.9% of Australians aged 16 to 85 experienced a mental disorder at some point in their lifetime in 2020 to 2022. Mental ill health is common, and many people experience periods where work becomes harder to manage.

This guide explains what support may be available in Australia, what legal protections may apply, and when taking leave or changing work arrangements could be more helpful than resigning immediately.

When work starts feeling unmanageable

You don’t need to wait until everything falls apart before taking your mental health seriously. Earlier support is often easier, both emotionally and financially, than trying to recover after severe burnout or crisis.

You may notice dread before shifts, panic around meetings, poor sleep linked to work stress, difficulty concentrating, frequent mistakes, emotional overwhelm, or physical symptoms such as headaches and nausea.

You might also find that you’re withdrawing from colleagues, struggling to recover on weekends, becoming more irritable at home, or relying on alcohol and other coping strategies more than usual.

These signs don’t automatically mean you need to resign, but they do suggest that something needs attention.

Is leaving your job the only option?

Sometimes, leaving a harmful workplace is the healthiest decision available. There are environments that remain unsafe, unsupported, or damaging despite repeated efforts to improve them.

But many people benefit from pausing first, gathering support, and considering alternatives before making a permanent decision.

When you’re exhausted or anxious, everything can feel urgent. Taking some time to stabilise can help you make decisions from a clearer and steadier position.

When temporary leave may be the better first step

Burnout has taken hold

If you’ve been carrying a heavy workload for too long, your nervous system may be under strain. Burnout can look similar to depression or anxiety. Rest, treatment, and boundaries may help significantly.

You need space to begin treatment

Therapy appointments, medication reviews, sleep recovery, and medical assessments are often easier when you’re not trying to hold everything together at work.

Work is part of the problem, but change may be possible

If your distress is linked to workload, poor management, bullying, harassment, or unclear expectations, leave can create breathing room while practical solutions are explored.

You feel too overwhelmed to decide clearly

When stress is high, it can be difficult to know if the role itself is no longer right for you, or if you’re currently unwell and need support first.

Can you take stress leave in Australia?

“Stress leave” is a common phrase, but it is not a separate category of leave under the Fair Work Act 2009 (Cth). In most cases, people are referring to personal leave, also called sick leave, because they are unfit for work due to illness or injury. That can include mental health conditions such as anxiety, depression, or acute stress.

Under the National Employment Standards, eligible full-time and part-time employees receive paid personal/carer’s leave. Casual employees do not receive paid personal leave, although they may access unpaid carer’s leave in some situations and may have other supports available.

A GP can assess your symptoms and provide a medical certificate if time away from work is clinically appropriate.

For some people, leave may involve a few days to recover. For others, it may mean several weeks of treatment and rest, followed by a graduated return to work.

It’s also worth checking your contract, modern award, or enterprise agreement, as some workplaces provide additional entitlements.

What if you’ve used all your leave?

If your paid leave has run out, it’s understandable to feel anxious. However, there may still be practical options available.

You may be able to use annual leave or long service leave if eligible. Some employers agree to unpaid leave, temporary reduced hours, flexible duties, or a return-to-work plan.

If work contributed to your condition, workers’ compensation may be relevant. Income protection insurance through your superannuation fund is another pathway many people overlook.

Depending on your circumstances, Centrelink payments may also be available.

Could workers’ compensation apply?

In Australia, workers’ compensation schemes in each state and territory may cover psychological injuries where employment was a significant contributing factor or where the legal threshold in that jurisdiction is met.

Claims may arise from bullying, harassment, traumatic incidents, chronic excessive workload, occupational violence, or prolonged exposure to unsafe psychosocial hazards.

Safe Work Australia reports that mental health conditions accounted for 10.5% of serious workers’ compensation claims in 2022 to 2023, with a median of 37 working weeks lost.

Because rules vary by state and territory, it’s sensible to seek advice from your union, lawyer, insurer, or the relevant workers’ compensation authority.

Your legal rights at work in Australia

Many mental health conditions may fall within the definition of disability under the Disability Discrimination Act 1992. This means employers generally must not discriminate against you because of a psychiatric condition or mental illness in recruitment, employment, dismissal, or other work-related areas.

State and territory anti-discrimination laws may also apply.

Reasonable adjustments

Employers may need to consider reasonable adjustments, unless doing so would cause unjustifiable hardship. Depending on your circumstances, adjustments could include:

• altered hours

• temporary workload changes

• remote or hybrid work arrangements

• quieter workspaces

• additional supervision or clearer instructions

• a phased return after leave

Protection from adverse action

Under the Fair Work Act 2009 (Cth), employees may also have protections from adverse action for reasons including disability, temporary absence due to illness (in certain circumstances), or exercising workplace rights.

Psychologically safe workplaces

Under work health and safety laws, employers must manage health and safety risks so far as is reasonably practicable. In many workplaces, that includes psychosocial hazards such as bullying, harassment, excessive workload, poor support, and traumatic exposure.

How the NDIS may be relevant

The National Disability Insurance Scheme (NDIS) is not an income replacement scheme, and it does not function like sick leave or Centrelink payments. However, it may be relevant for some people with significant and permanent psychosocial disability arising from mental illness.

“Psychosocial disability” refers to disability that may arise from the interaction between a mental health condition and social barriers, affecting daily functioning. If eligible, NDIS funding may support functional needs such as:

• psychosocial recovery coaching

• help building daily living skills

• support workers

• assistance with community participation

• employment-related capacity building supports

• therapies or supports that meet NDIS criteria

NDIS eligibility depends on legislation and individual circumstances. Having a diagnosis alone does not automatically qualify someone.

If your mental health condition creates substantial and ongoing functional impairment, it may be worth discussing NDIS access with your treating team or a support organisation.

Centrelink and income support

If you’re temporarily unable to work, JobSeeker Payment may be available depending on income, assets, mutual obligations, and medical evidence. Some people with permanent impairment and limited work capacity may qualify for the Disability Support Pension, subject to strict eligibility rules.

Services Australia can also assess temporary exemptions from mutual obligations in some circumstances where medical evidence is provided.

Because payment rules change, always check the current Services Australia information.

How to speak with your employer?

Many people worry that they must disclose every diagnosis or private detail. Usually, that isn’t necessary.

You may choose to explain that you’re dealing with a health issue affecting your current capacity, that your doctor has recommended leave or adjustments, and that you’d like to discuss practical arrangements.

You might speak first with your manager, HR, a union representative, or another trusted senior staff member. If your workplace offers an Employee Assistance Program, that may also be useful.

Keep notes of important conversations, copies of certificates, and written records of any agreed changes to duties or hours.

What if staying in the role is harming your health?

There are situations where leaving may be the most sensible option. This can happen when a workplace remains unsafe, complaints go nowhere, symptoms return each time you re-enter the environment, or your treating professionals advise stepping away.

If resignation feels likely, it can help to make the decision from as steady a position as possible. Exploring leave, income support, and treatment first may reduce pressure and give you more control over what comes next.

Final thoughts

When mental health issues interfere with work, it can feel as though every option carries risk. Yet many Australians have more support available than they realise. Leave entitlements, legal protections, treatment, insurance, Centrelink, the NDIS, in some cases, and workplace adjustments can create breathing room during a difficult period.

You don’t need to solve everything at once. Often, the most helpful first step is a medical appointment, a confidential conversation, or a short pause that gives you space to recover and consider what comes next.