PSYCHOLOGICAL problems have overtaken muscle and bone injuries as the leading reason for the granting of the disability support pension.
Despite falls in the number of people receiving the DSP for other disabilities, mental illnesses are the fastest growing category, with a jump of more than 1500 people over two years.
The government's latest figures show 26,247 people with psychological problems were granted the DSP in 2010-11, up from 24,707 in 2009-10.
Of the 824,082 people on the DSP, at a cost of almost $15 billion this financial year, 254,672 are receiving the pension for mental health reasons.
Claims for muscular and skeletal problems - the top category in 2009-10 with 25,965 grants - dropped to second, down 775 grants.
Grants for intellectual impairments and learning problems have also dropped off in the wake of government reforms to tighten the scheme.
Fewer people with problems involving the circulatory, respiratory, sense organs and nervous systems are being granted the DSP, along with people with brain injuries, chronic pain and intestinal disorders.
Apart from the jump in grants to the mentally ill, the only other growing grant categories are for those living with cancer and people with endocrine and immune problems.
Mission Australia chief executive Toby Hall said studies had shown up to 85 per cent of people with a mental illness could return to work.
He said a New Zealand disability model allowed sufferers to take weeks off at a time and be paid government benefits while they received treatment before they returned to work.
"Rather than someone being on benefits for 12 months, they might have a benefit for five weeks in a year," he said.
Community Services Minister Jenny Macklin said the government had uncapped the Disability Employment Service, resulting in 158,000 people finding a job. Another $121 million has been allocated to give 2500 people with a severe mental health problem personal job and health support and mentoring.
"Personal helpers and mentors will work closely with government employment services," a spokeswoman for Ms Macklin said.
The DSP grew by about 400,000 recipients during the Keating and Howard governments. Reforms by the Howard government failed to stem growth and the recent efforts by Ms Macklin have seen just 7826 people leave the DSP in the past two years.
The spokeswoman said it was the most sustained drop in claimants in three decades. The DSP has grown by more than 90,000 recipients under the Rudd and Gillard governments, up from 732,367 in 2008.
Former Howard government community services minister Amanda Vanstone said she supported changes to stem the growth of the DSP.
"No government can afford to have continued growth in its DSP without doing something about it for two reasons," Ms Vanstone said.
"One, finding out what is pushing people on to this benefit, it is not good for them.
"The second thing it's very expensive. Your real job if you care for the disabled is to get those who can get a job into a job."
A spokewoman for Ms Macklin said the psychological/psychiatric category can include autistic disorder as well as mental illnesses such as bipolar and anorexia.
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