A major national study has been released by the Department of Health, Disability and Ageing. Please note that this study only relates to psychologists working in health, it does not tell the full story of our diverse profession including disability, education, organisational psychology or the justice system to name just a few areas.
The Psychology Supply and Demand Study (April 2026) shows:
- A current shortfall of psychologists, growing to over 7,000 by 2038
- When unmet demand is included, in just the health sector, the 2025 shortage was estimated to be over 10,000 psychologists with this predicted to rise to a shortage of over 24,000 psychologists in 2038
- This represents a 57.3% undersupply based on health sector now, worsening to 96.6% by 2038
While demand for psychological care continues to grow and this study presents a vital evidence base for future actions, advocacy and reform, we are also hearing a very different and difficult reality from members:
- Clients are reducing frequency or cancelling appointments due to cost-of-living pressures
- Increased cancellations linked to the fuel situation and rising travel costs
- Ongoing impacts of NDIS pricing and travel changes on service viability
- Practices under pressure from inadequate rebates and stagnant fee structures
Many psychologists are trying to balance the increasing need with declining affordability and sustainability for both clients and practices.
This is not just a workforce issue. It is a system under strain from multiple directions at once.
The two-tier system is part of the problem.
At a time when Australia is facing a workforce shortfall of this scale, the two-tier system is making things worse by limiting affordable access for clients, reducing the viability of bulk billing, undervaluing a large portion of the workforce, and creating bottlenecks in an already constrained system.
Put simply, we cannot afford a system that artificially restricts access when demand is rising, and the workforce is already insufficient.
AAPi is advocating for practical, immediate reforms that reflect the reality on the ground:
Improving access and affordability
- A single, increased Medicare rebate for all psychologists
- Expanding Better Access sessions based on clinical need
- Access to psychologists for NDIS participants
- Bulk Billing incentives
Supporting viability and workforce capacity now
- Including provisional psychologists in Medicare
- Reducing administrative burden and red tape
Strengthening the future workforce
- More Commonwealth Supported Places
- Paid placements to address placement poverty
- Funded graduate and internship pathways
- Faster, fairer training pathways
- Targeted rural and regional incentives
In response to this report, AAPi has issued a national media statement calling for urgent action, integrated these findings into our advocacy, continued direct engagement with government and key stakeholders, and strengthened our case for ending the two-tier system.
We know many of you are navigating a very challenging environment, supporting clients through increasing complexity, while also managing cancellations, financial pressures, and system constraints.
AAPi is working at both the system level, advocating for reform, and the individual level, supporting members through these day-to-day challenges.