Financial hardship and psychological distress during and after COVID-19 lockdowns in Victoria, Australia: a secondary data analysis of four repeated state-wide surveys

Abstract

Objectives: This study aimed to estimate the prevalence of individuals experiencing financial hardship and to examine the relationship between their experiences of financial hardship and psychological distress during and after the COVID-19 lockdowns.

Design: This is a secondary analysis of data from four repeated state-wide surveys conducted in 2020 and 2022.

Setting: Victoria, Australia.

Participants and outcome measures: All Victorian residents aged 18 years and above were eligible. Psychological distress was assessed using the Kessler Psychological Distress Scale-6 Item version (K6), while financial hardship was assessed using a nine-item scale. Relationships between experiencing any form of financial hardship and experiencing high psychological distress (K6≥19) were evaluated using an autoregressive and cross-lagged model that used data from all four surveys.

Results: A total of 2000, 2000, 2349 and 2444 individuals responded to surveys 1, 2, 3 and 4, respectively. The proportion of people experiencing at least one form of financial hardship increased from 23.5% in 2020 (the first year of the pandemic) to 38.5% in 2022 (the third year of the pandemic). The most vulnerable groups facing financial hardship included young people, Aboriginal & Torres Strait Islanders, individuals with disabilities and those with low income. The proportions of individuals experiencing high psychological distress followed a quadratic trajectory, with the peak occurring between the first and third years of the pandemic. Experiencing financial hardship was consistently associated with high psychological distress at each time point in this study. However, there was no evidence of a longitudinal relationship between financial hardship and high psychological distress.

Conclusions: The data from this study confirmed a significant increase in the proportion of individuals facing financial hardship among the adult population in Victoria from the first to the third year of the COVID-19 pandemic. This study does not ascertain a longitudinal effect of financial hardship on psychological distress during the pandemic. Further research is warranted to confirm this finding.

Keywords: COVID-19; EPIDEMIOLOGY; MENTAL HEALTH; PUBLIC HEALTH.

Figure 1. Timing of the surveys and COVID-19 lockdowns in Victoria, Australia (Source: https://www.coronavirus.vic.gov.au).

Figure 2. Autoregressive and cross-lagged model of the relationship between financial hardship and high psychological distress. Single-headed solid arrows represent the direction of the statistically significant paths; single-headed dotted arrows represent hypothesised directional paths but not statistically significant in this model; double-headed arrow indicates the variables that are assumed to be correlated; bold path coefficients are ORs; italic coefficients are covariance. All coefficients were estimated using a single path analysis model adjusted for sociodemographic characteristics presented in table 1. See online supplemental table 2 for the full details of this model. High psychological distress: Kessler Psychological Distress Scale-6 items score ≥19; 1008 participants provided data at both survey 1 and survey 2; 432 participants provided data at both survey 2 and survey 3; 731 participants provided data at both survey 3 and survey 4.