1 November 2012

Impact of the Crisis and Austerity Measures on Health Systems and Disadvantaged Groups


Impact of the Crisis and Austerity Measures on Health Systems and Disadvantaged Groups Mental Health Europe Contribution to European Public Health Alliance
– Working Document – 2012


MHE carried out a survey among its members in February 2012 on the effects of the crisis and austerity measures on people with mental health problems. We assessed a number of areas from mental health services through benefits to community living. MHE received responses from six countries: Austria, Greece, Italy, Ireland, Malta, and the UK.

The overall picture is that budgetary cuts affect people with mental health problems in several areas of life, from income support to access to services. In Greece the austerity measures threaten to reverse the entire Psychiatric Reform. However, some positive aspects have been found as well indicating a recognition of the specific needs of people with mental health problems, for example in Ireland.

The structure of this contribution is as follows:

The first part provides a summary of responses to MHE’s survey received from the Austrian, Italian, Irish and Maltese members. These responses were relatively succinct providing mainly indications of the situation.


Parts 2 and 3 present reports from MHE’s Greek and UK members, that are highly detailed and provide a very well worked out, stand-alone description of the situation in these two countries.




Disability and employment benefits


Italy has seen a reduction in disability benefits. The criteria for benefits have been tightened, so it is more difficult to obtain them. Current benefit recipients come under revision for their eligibility. It has also become more difficult to receive support for community living. Italy has seen a reduction of employment benefits.

In Austria the care allowance was not increased in the last years and now the obstacles to claim this where raised. The new austerity package is also means that the criteria for accessing disability allowance have been tightened. Overall, the nine provinces of Austria have to contribute to the reduction of an amount of 5 Milliards of the austerity package. The problem is that the provinces are mostly responsible for financing the services for disabled people. Therefore likely there will be a reduction of the budgets for the social services.

In contrast, in Malta, the austerity measures so far have not affected people with mental health problems. There have been no changes in the social assistance and disability benefits. In response to the crisis, Maltese community mental health services initiated a project of supported housing where people with mental health problems are given the opportunity to rent subsidised and affordable accommodations.

Also in Ireland there has been no decrease in disability benefits. Cuts proposed by governments were reversed after a public process. Ireland has not seen a decrease in employment benefits that affected persons with disability either.


Funding for job inclusion and training for persons with disabilities


In Italy, the general social funds from the national government to the regions have been lowered. The regions often try to compensate the less income from the national level with other local resources.

In Austria last years there were cuts in financing services for people with mental health problems. In 2011 in Upper Austria the budget for Psychosocial Advisory and the services for leisure-time and communication (clubs etc.) were cut by 33%, so some services had been closed. In 2011 in Styria the contracts with the service-Providers where terminated, under the new contracts, the services get less money.

In Malta so far there were no changes regarding job inclusion or training for people with mental health problems. Training Programmes and government schemes to support employers who take on board persons with disabilities or mental health problems are co-financed by E.U.

Ireland has seen the reverse: extra funding was provided for such programmes.


Funding for NGOs that deliver projects on the ground


In Ireland, there were some cuts of funding for NGOs that work on inclusion of people with mental health problems, however they were not significant.

Contrary to this, Italian NGOs receive less and less money for projects they have been doing for years. However our National Focal Point reports that people with mental health problems are more protected from the effects of austerity more than other vulnerable groups.


Mental Health Services


In Ireland, mental health services, relative to other areas of health services and disability services, have been designated as a protected area by the current Government with an extra €35 million provided for the development of human resources in 2012. All other areas of the health services have had their funding cut. While it may appear that mental health services are not severely affected by the economic situation the facts are that mental health has for many years suffered inequitable funding relative to other health sectors and are only now been recognised as deserving special treatment. The positive budget funding and the public acceptance of the special status of mental health services have had some positive impact. However protection of services at ground level in some parts of the country remains challenging.

Meantime in Upper Austria region, due to budget cuts for psychosocial counselling, people with mental health problems have to go in case of crisis into hospitals.




1. The impact of the economic crisis and austerity measures on people with mental health problems.


As discussed below, the crisis seems to have led to a focus in Government on reducing the cost of disability benefits and this has had an impact on people with mental health problems. In addition, it has been accompanied by a focus within much of the media on questioning the legitimacy of these benefits and this has impacted on people with mental health problems through increased anxiety and a rise in disability hate crime that has been linked to this coverage – as shown in the three documents below.


Report from Inclusion London on coverage of disability in the media:

http://www.inclusionlondon.co.uk/domains/inclusionlondon.co.uk/local/media/downloads/bad_news_f or_disabled_people_pdf

2020 article in response to official figures on rising disability hate crime:


Guardian article about rising hate crime based on a survey of disabled people by Scope, a disability



There is a sense that attitudes towards people with disabilities may have hardened as a result of the economic crisis because people are less tolerant of money spent on this group and also less trusting about their conditions and barriers. This may be worse for people with mental health problems as their conditions are ‘invisible’ and so may not be obvious to others.


2. The benefit cuts.

It has generally become harder to access disability benefits over the last five or so years. Although this trend pre-dates the economic crisis, austerity has been used as a reason/motivation to accelerate the process of tightening eligibility and reassessing previous claims.

As with the media coverage discussed above, these changes have impacted on the anxiety of people with mental health problems, as shown by a survey undertaken by Mind in 2011:

Anxiety survey:

Mind polled over 300 people currently claiming Incapacity Benefit (IB) for mental health problems about the upcoming reassessments during March 2011 and found that:

  • 75% said concern about the WCA had made their mental health worse
  • 51% reported it had made them have suicidal thoughts
  • 45% have visited their GP or psychiatrist and 32% have increased their medication as a result of the anxiety caused by the prospect of reassessment
  • 78% did not feel well informed about forthcoming changes to IB
  • Only 20% stated that they had got information about the changes from the Department for Work and Pensions
  • The most common source of information was TV or newspapers – 62%
  • 95% do not think that they will be believed at their assessment.
  • 89% believe that they will be forced back to work before they are ready or able.


A new out-of-work disability benefit was introduced in 2008 and existing claimants of previous versions of this benefit began being reassessed under the new system in 2010. The initial findings suggest that around 25 per cent of people claiming these older benefits will not qualify for the new system.

The actual rates of employment benefits has not been decreased but their measure by which they are kept in line with inflation has been switched from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI) which will almost certainly lead to slower increases in the rate of benefits.


The Government is planning to replace Disability Living Allowance, which is a non-means tested benefit and is payable to people irrespective of employment status to partially compensate for the additional costs of living with a disability. The new benefit, Personal Independence Payment, will be introduced in 2013 and is expected to lead to a 20 per cent reduction in cost (compared to DLA) by 2015.


3. Programme cuts:


There has been no reduction of funding for job or training that affected people with mental health problems – the budgets for Access to Work, which supports people in work with disabilities, has remained the same and may increase. The Government has introduced a new Work Programme to help people back to work, which replaces an array of previous schemes, but it is not clear yet what the impact of this will be.

There has also been a change of direction from Government in terms of equality laws with a greater focus on the burden this can present to business in difficult economic times. We are concerned that this may lead to a weakening of rules and regulations in this area that offer protection to people with disabilities.


4. Funding For NGOs and local authorities


Many local organisations are experiencing cuts because they are funded by Local Authorities whose budgets have been dramatically decreased. This will inevitably have a knock-on impact for the inclusion of people with mental health problems as they will have access to less support.

Of particular concern are cuts to local advice agencies occurring due to cuts in their Local Authority funding but also because of changes to Legal Aid which currently contributes to the running costs of many such agencies. This will mean that people with mental health problems will struggle to get access to support and advice on issues like welfare benefits, debt and employment, which will have a substantial impact on their social inclusion.


5. Effect of the crisis and/or of the austerity measures on quality of life and social inclusion of people with mental health problems.


At this time, the main impact is likely to be a great deal of uncertainty about the future of services and support which they currently receive. However, cuts are also starting to take effect and many people will be beginning to see changes and reductions in services and support.

In September 2011 Mind produced a booklet that summarises the effects of the reforms to health and social care, welfare and benefits, legal aid, employment and equality laws are having on people with mental health problems.



People may also be experiencing other effects of the crisis/austerity (such as unemployment, debt, reduced purchasing power, stress at work etc) that could exacerbate existing mental health problems or lead to new mental health problems. This is demonstrated by a survey of workers that Mind commissioned in 2011


Mind’s survey of over 2,000 workers found:

  • 41% are currently stressed or very stressed in their jobs – making it more stressful than money worries, marriage and relationships or health issues
  • 2 in 3 had been put under more pressure by management since the downturn
  • A third feel stressed by a reduction to budgets in their workplace
  • 48% are scared to take time off sick
  • 28% are stressed by the threat of redundancy, rising to 41% for public sector
  • 1 in 5 fear mentioning stress would put them first in line for redundancy
  • 7 in 10 said their boss would not help them cope with stress


PART 3: REPORT FROM THE MHE’s GREECE MEMBER ‘Society of Social Psychiatry & Mental Health’


  1. The impact of the economic crisis and austerity measures on people with mental health problems.


The financial crisis and the harsh austerity measures that this has led to are the primary features of Greece’s social reality during the last months. Regarding the mental health sector, the Psychiatric Reform is under serious threat. The following text that is drawn from a letter that the Argos Network of NGOs offering psychosocial rehabilitation and mental health services, addressed to Mr. László Andor, Commissioner of Employment, Social Affairs and Inclusion, accurately describes the dire situation of the mental health sector in Greece:

“…Twenty one years since the beginning of the psychiatric reform in Greece, after the world outcry about the sordid conditions in public psychiatric hospitals, there is a threat for people with mental health problems to return in public psychiatric hospitals due to severe weaknesses in the operation of the rehabilitation units under the pressure of the economic crisis in Greece…there are problems concerning the long-term organizational planning and monitoring of these units as part of the public mental health services system. Furthermore, the low priority for mental health policy on the agenda of the ministry has as a result enormous cutbacks in financing […].”

The overall work, that took place since 1990 (within the framework of European and national programs – regulation 815/84, Psychargos A and B phase) constitutes an important achievement and indeed has reversed the negative opinions and attitudes by the European Union, International and European Mental Health institutions and by the citizens of Europe about the quality of the social state in Greece. It has received praises from the national governments, the responsible bodies of the Commission and the World Scientific Psychiatric Community.

During 2005-2008, these units have faced a crucial financial crisis and the danger of closing down because of the lack of support from the Governments, which have adopted an anticommunity and antisocial model for the provision of mental health care and have planned to reopen of the asylums. Fortunately, after the intervention of the European Commission and the Commissioner Spidla – Ministry of Health Agreement, the plans of the Government have been collapsed and the psychiatric reform continued as it has been planned.

Despite the intervention of the European Commission, these units are continuously facing severe financial problems and operational problems due to the disability of the Ministry of Health and Social Solidarity to provide viable solutions, to commit to its obligations to the European Union and to implement the Agreement between the European Commission and the Greek State (Spidla’s Agreement) of April 7th 2009, signed by the previous Commissioner of Employment, Social Affairs and Equal Opportunities Mr. V. Spidla and the previous Minister of Health and Social Solidarity Mr. D. Avramopoulos).

Unfortunately, those financial problems are enlarged and become crucial due to the decision of the Government for a dramatic decrease of the budget of 2011, which is estimated up to 25% of the total amount of 82 million Euros and 50% of the budget of the last six months which is not sufficient to cover the needs of the Units.”

In the state budget for 2012, the foreseen amount for the Mental Health sector will only cover 45% of the needs of the NGOs offering psychosocial rehabilitation services. This means that their operational costs are covered until June 2012. After this time, the threat of being shut down will become a reality for many of these organizations.

Under these circumstances the units will be unable to provide the necessary services. Especially during this period of the enormous social crisis in Greece, the demands for mental health services to the public are increased. If the 2012 budget for mental health remains at the current foreseen level (i.e. covering 45% of the required funds) the consequences will be as follows:

  • Close down of the units or limitation of rehabilitation and therapeutic work of the units, and decreased level of quality of care, since the necessary resources will not exist for the supply of essential materials and services
  • A large number of employees in these units will lose their jobs due to the lack of funding
  • Entire geographic regions of the country such as Cyclades, Thrace, Fthiotida, will be threatened and remain without care cover in the mental health sector, since several units of Primary Health Care (Mobile units, Day Centres) will be unable to cover the operation expenses.
  • There is a risk of losing the NSRF recourses, as there are no approvals of feasibility from the Ministry for new projects; as a result the needs of citizens cannot be covered.
  • Re opening of a number of closed asylums because of the lack of services.


Finally, according to a recent article on the impact of the financial crisis on mental health “emotionally vulnerable employees or individuals who already suffer from mental ill health belong to the population groups that are mostly affected by the economic downturn. In their case, job insecurity and associated stress can have a stressful effect on their already aggravated situation. Furthermore, against the backdrop of the financial crisis, employers tend to become less “tolerant” by detecting the “weakest links” and dismissing them sooner. This creates a vicious circle where mental illness leads to job loss, and where poverty and unemployment causes deterioration of mental illness” (Bouras, Lykouras).


2. Benefit cuts


Since September 2011, a new Centre for the Certification of Disabilities has been set up which from now on will act as the central organization responsible for evaluating the percentage of disability that a person has. This percentage determines the pension and other benefits that the person with disability (PwD) is entitled to. In other words, people with mental health problems who were certified with a certain percentage of disability (as is the case with all other PwD) have to re-submit to this Centre the necessary certificates that demonstrate their disability.

So far, no cuts have been made to the disability entitlements. However, it remains to be seen whether the hard austerity measures will finally lead to a reduction of the disability benefits or pensions, which are in most case quite low already ranging between 350-600 Euros. In addition, delays in the evaluations by the Centre for Certification of Disabilities have been noted, that in some cases have led to the suspension of benefits and pensions until issues a decision.

Regarding the medication of people with mental health problems, some social security funds now require the patients to make a contribution (ranging between 10% and 20%) for acquiring the necessary medication. In addition, the hospitals now prescribe psychiatric medicines covering a one month period (instead of a three month period which has been the norm until today), while some shortages in the available psychiatric medicines have been noted.

At the same time, all pensions and salaries have been cut in Greece which has led – in many situations – to a dramatic deterioration of the standard of life of most Greeks. The unemployment benefit has also been drastically reduced -> from 460 Euros to 360 Euros. This has negative effects for the unemployed who are a particularly vulnerable social group. This is very worrying if one considers the adverse effects of unemployment on a person’s mental health (e.g. increased levels of depression and stress).


3. Funding for services


The Greek government has been forced to make severe budget cuts on all sectors. As mentioned above, cuts have been made on all salaries and pensions. Regarding the mental health sector, the government’s budget has been cut by more than 50%, which means that there is a very real threat that during the second half of the year many services will be suspended or cut. At the same time unemployment levels are soaring, especially among young people. In this difficult situation, the social inclusion of people with mental health problems becomes even more difficult than before.

The Limited Liability Social Cooperatives, that promote the employment of people with mental health problems are also under threat as the employment position of the mental health professionals who support these, is threatened.

The only funding source available at this period for supporting the job inclusion of people with mental health problems comes from the National Strategic Reference Framework (NSRF) 2007 -2013 whose operation has been delayed (due to the inability of the State to contribute a percentage of the funding). However, a number of initiatives will be launched under the NSRF that will support socially vulnerable groups, including people with mental health problems.

Specifically, the Society of Social Psychiatry and Mental Health (S.S.P. & M.H.) will undertake the following actions with the framework of the NSRF:

  • Operation of a Day Centre for the psychological support of people with mental health problems (who have been formerly hospitalised) who live in the community;
  • A Programme for the Psychological Support of Unemployed persons;
  • A Programme funding therapeutic interventions for the psychological support of people with mental health problems within the community;
  • A programme funding community sensitisation activities for a two-year period;
  • A programme funding social work in Northern Greece.

All the above programmes are expected to be launched within the next months and their duration will be for two years. However, it remains to be seen whether such helpful interventions will continue to operate after the end of the two year funding period.

Regarding the job inclusion of people with mental health problems, a lifelong learning programme for the employment of people with mental health problems for a three-month period will be launched by the Ministry of Employment.


4. The effects of crisis on mental health


It is widely accepted that the current financial crisis, has adverse effects on people’s mental health. Regarding the general population, the evidence regarding the health effects of the financial crisis is disheartening. A recent article by Kentikelenis et.al. appearing in the journal The Lancet notes that in Greece, there has been a significant increase in unemployment, which rose from 6.6% in May 2008 to 16.6% in May 2011 (especially youth unemployment which rose in the same period from 18.6% to 40.1%. More recent evidence shows that the general unemployment level approaches 20%). This is a worrying finding as according to several studies, unemployment increases both the risk of psychiatric and somatic disorders. For example, a strong correlation has been found between job loss and clinical and subclinical depression, substance abuse, anxiety and antisocial behaviour. In addition, several studies have shown that prolonged unemployment increases mortality rates.

According to the same article there is a worrying increase in levels of depression and levels of suicide has already been noted.: “There are signs that health outcomes have worsened, especially in vulnerable groups….Suicides rose by 17% in 2009 from 2007 and unofficial 2010 data quoted in parliament mention

a 25% rise compared with 2009. The Minister of Health reported a 40% rise in the first half of 2011 compared with the same period in 2010. The national suicide helpline reported that 25% of callers faced financial difficulties in 2010 and reports in the media indicate that the inability to repay high levels of personal debt might be a key factor in the increase in suicides.” It has to be noted that prior to the crisis Greece had some of the lowest rates of suicide in Europe. Some psychiatrists have said that the economic crisis has triggered a 25 to 30 % increase in the number of patients seeking their help.

Based on this evidence from Greece, the International Social Security Association concludes that “Greece has experienced significant negative mental health and social effects…(and) further reductions to access and the level of benefits are to be expected once tougher austerity measures take hold. This is likely to add to the difficulties faced by Greeks in maintaining good mental and physical health.”

The University Research Institute of Mental Hygiene operates the National Depression and Suicide Helpline (1034). According to recent evidence, in 2011 the helpline received 40% more calls than in 2010, while the majority of calls were in some way linked to the financial crisis (e.g. unemployment, inability to cover living costs, stress about the future). A large number of callers were interested in receiving information regarding free mental health services that they can use. According to evidence from the national immediate assistance helpline (197) of the National Centre of Social Solidarity, the percentage of people seeking help for issues relating to food and shelter has doubled, while there is a large increase in the number of people who are unable to cover their living costs and are seeking answers regarding social security and health issues. What is stressed is that the psychological tension expressed in these calls has significantly increased.

We should also note that despite the fact that the needs for mental health services increase due the financial crisis and unemployment, an increasing number of people is unable to afford private mental health services. For this reason they resort to public sector services which are currently overloaded. Currently there is a minimum 3 month wait for most available public mental health services which is expected to increase as public services are faced with budget and staff reductions. Finally, starting in 2012, the medical expenses for mental health services are no longer exempt from taxation (this policy will apply for all medical expenses) and the social security state funds have also reduced the mental health services covered by the insurance (e.g. some social security funds covered four psychotherapies, however this is no longer the case).

Finally, evidence from the mental health Services offered by the S.S.P. & M.H. and the Institute for the Mental Health of Children and Adults, demonstrates that the stress and depression levels among users of these services (associated with the financial crisis) have increased. In addition, a number of remissions have been noted among patients that are linked to the stress caused by the financial crisis.


5. NGO response


In Greece there are currently a number of social solidarity initiatives, undertaken by a variety of public or private bodies or NGOs, aiming to help socially vulnerable groups. Such actions include:

  • Initiatives that operate (or are about to be launched) within the framework of the NSRF for the support of people with mental health problems, the unemployed or other socially vulnerable groups (see also answer to question 2b).
  • Initiatives (mainly by the Church and NGOs) offering food, shelter, clothes and medicine to the homeless and other groups in need.
  • Creation of “social grocery stores” that offer food to the poor in various areas of Greece.
  • Creation of “social health centres” offering healthcare and medicine to the poor.
  • The 25 Mobile Psychiatric Units (M.P.U.) which operate in a variety of – mainly remote – geographical areas of Greece offer Mental Health Services for the psychological support of people in relation to the financial crisis.
  • NGOs offering mental health services have began to undertake community sensitisation activities specifically relating to mental health issues linked to the financial crisis, such as dealing with depression, stress, unemployment etc.
  • A number of non-profit or charitable organisations make donations, organise fundraising events, or launch specific programmes for supporting the socially vulnerable groups.
  • School offer services to support children of high risk.
  • Art and culture events by well-known artists are offered to boost the morale of the people.




G. Bouras and L. Lykouras, (2011), “The Economic Crisis and its Impact on Mental Health” in Encephalos Journal, Volume 48, Issue 2, April-June 2011

International Social Security Association (2011) “Coping with crisis? Recession, mental health and social security” found at www.issa.int / Feature Article/ 09.12.2011

Kentikelenis A. et.al. (2011), “Health effects of financial crisis: omens of a Greek tragedy”, The Lancet, Volume 378, Issue 9801, pp. 1457 – 1458.

Article in Kathimerini (newspaper), March 4th, 2012, “Suicide Helpline” by Yiannis Elafros.




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