Canberra's overstretched youth mental health service has been without a federal funding increase for four years, a committee has heard.
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Headspace is trying to stretch existing resources to cope with an rising demand for its services.
Demand for the service has grown by 10 per cent each year, and is receiving 160 to 200 referrals each month
Disturbingly, at-risk young people are facing a wait time of up to eight weeks to get proper help in some cases.
Despite the increasing demand, Headspace has not had a funding increase since 2012 from the federal government.
Headspace's Nic Hubbard told a Legislative Assembly estimates committee on Friday that the organisation was planning to re-apply for ACT government funding, after a similar application was knocked back two years ago.
"Our capacity to meet our demand is very compromised," Ms Hubbard said.
"Whilst we're really grateful for our federal funding, trying to meet demand is definitely our biggest challenge," she said.
The service helps those aged 12 to 25 who are experiencing mild to moderate mental health issues or drug abuse problems.
It has one facility in Belconnen and another in Queanbeyan, both of which support young Canberrans.
Headspace has been put in further funding uncertainty by changes to federal funding arrangements, which will see government responsibility for the service handed to the capital primary health network.
Mental Health Community Coalition ACT executive officer Simon Viereck also gave evidence to the committee on Friday.
He urged for greater investment in community-based mental health services, while welcoming funding for a new step-up, step-down mental health program in this month's ACT budget
Mr Viereck said the most intelligent use of money was putting it toward helping people in the community, rather than costly hospital beds.
"People with experience of mental health issues tell us that that is their preference, that they prefer to stay in the community and to be supported there," Mr Viereck said.
"It's also clear that providing support early, and keeping people well in the community, keeping them out of hospital, provides better outcomes, both for the individual, and less expensive for the society as a whole.
"So we are particularly disappointed in this budget that the funding for the recovery college, as well as the expansion of the detention exit community outreach program and the way back from suicide prevention program, there's only funding for one year."
Mr Viereck said mental health services continued to be underfunded as a proportion of the health budget, compared to the overall burden of disease.
Mental health accounts for 15 per cent of burden of disease, according to the ACT chief health officer, but only receives roughly 12 per cent of the health budget.
Mr Viereck also expressed concerns that there were no measures in the budget to ensure psychosocial rehabilitation and recovery support services would still be available to those who are not eligible for the National Disability Insurance Scheme.
"This includes people who need those services on a non-going basis, and for whom access to those services can mean the difference between the path to recovery, self-management, and a productive life in the community, and on the other hand, decline into enduring illness, acute needs, and a permanent disability," he said.
"We know that clinical services, hospital beds are very expensive. We know that community support is relatively inexpensive, certainly from a human and an economic view.
"So the smart money is supporting people to stay well in the community."
If you need help or support contact, Lifeline: 131 114, beyondblue: 1300 22 4636, Kids Helpline: 1800 55 1800 (24/7 crisis support), or headspace: 1800 650 890 www.headspace.org.au.
