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As state and federal ministers thrash out a new National Mental Health and Suicide Prevention Agreement, new analysis shows providing a home linked to support is the single greatest improvement that could be made for the tens of thousands of Australians trapped in a cycle of crisis, while also offering a strong fiscal benefit.

Breaking the Crisis Cycle finds Australia has effectively shifted people from asylums to the streets, hospitals, prisons, and death, because of a decades-long siloed approach to housing, homelessness and mental health. More than 31,000 people are trapped into a cycle of crisis, repeatedly shuttling between acute mental health services, homelessness, crisis accommodation, hospitals and prisons.

This cycle destroys people’s hope and wellbeing leading to deaths of despair. One in 20 suicides in Australia involve people who have been recently homeless, and deaths of despair from suicide or overdose are the leading cause of death among people without homes.

The analysis notes that persistent homelessness among people reporting a current mental health issue is increasing, jumping more than 30% between 2019 and 2025, to 20,500 people annually. Workers in the sector note that prisons are effectively operating as modern day asylums, with 40% of prisoners diagnosed with a mental health condition and more than one third having previously experienced homelessness. Health professionals also describe “discharges of despair,” where people leave care into insecure housing or homelessness, and their mental health crisis returns.

“Ministers negotiating the new agreement have a rare chance to fix a problem that has festered for decades,” Homelessness Australia CEO Kate Colvin said. “Every year we leave this gap unaddressed, more people are pushed out of hospital and into homelessness, and more of them end up returning to hospital or dead. Providing a safe home where people also receive the support they need is not a side issue to mental health reform, it is the single biggest lever governments have to pull.”

Mental Health Australia CEO Carolyn Nikoloski said ensuring access to safe housing alongside mental health support was central to effective care and should not be treated as a separate issue.

“It’s incredibly hard to recover from a mental health crisis without somewhere safe to live.” Carolyn Nikoloski said. “For people seeking support, it’s so destabilising to be discharged from inpatient or residential services without anywhere safe and supportive to land. It’s hardly surprising that people in those circumstances have a higher rate of readmission or crisis relapse, which is why ensuring that everyone experiencing mental health challenges has access to housing is an essential part of supporting their recovery.”

The paper, endorsed by 20 leading mental health and homelessness peaks and organisations, calls on state and federal ministers to fund a National Mental Health Homelessness Prevention Program, delivering 20,000 additional supportive housing places using Housing First principles, alongside a national tenancy sustainment program for people with psychosocial disability. The homes would be delivered through a dedicated Housing Australia Future Fund funding round, with targeted recovery focussed support resourced via the Mental Health and Suicide Prevention Agreement and new resources for foundational supports for psychosocial disability.

The case for action extends beyond the human cost. The most acute homelessness currently costs taxpayers around $140,000 per person each year, largely through avoidable health and justice expenditure. Sacred Heart Mission’s Journey to Social Inclusion program, which typifies the approach being recommended, already delivers a return of about $2.20 for every $1 invested and an estimated $350,000 net benefit per participant over time. And the 50 Lives 50 Homes Program in Western Australia achieved a 48% reduction in emergency department presentations, a 51% reduction in hospital admissions and a 64% reduction in psychiatric inpatient days among the people it housed.

Contact: Eliot Barham 0423 921 200

Download the Breaking the Crisis Cycle Report