A jump in psychological distress and loneliness among young people during the pandemic reflects a 20-year trend while inequality is lower than before 2020.

That's according to the latest Household, Income and Labour Dynamics in Australia report from the University of Melbourne which offers ongoing insight into the nation's health, social lives and employment market.

The latest survey was done in 2021 when most of Australia was in lockdown and involved 17,000 people from 9000 households.

Some 42.3 per cent of people aged 15-24 reported psychological distress that year, up from 18.4 per cent a decade before.

They also had the highest levels of loneliness, a notable exception to an overall trend of loneliness decreasing among all other ages from 2001-2021.

"There is a clear trend of younger people becoming lonelier and feeling more isolated as time goes on," co-author Ferdi Botha said.

"Loneliness increased in the first two years of the COVID pandemic, but for young people, there is a longer-term trend increase apparent," he explained.

"It may be that this is connected to growth in smartphone and social media use."

Dr Botha said action and policy intervention is needed or else it could lead to lower mental health and physical wellbeing, and other societal issues.

The survey found single parents reported higher levels of loneliness than couples both with and without children.

Lead author Professor Roger Wilkins said overall household incomes were higher in 2021 compared with two decades before that and there has also been a drop in inequality.

"Inequality has declined slightly with the arrival of COVID," Professor Wilkins said.

"It was at its lowest during 2020 and increased slightly in 2021, but was still lower than before the pandemic."

Employees most likely to work from home were in finance, insurance, information media, telecommunications, professional industries, and scientific and technical services, while those least likely to have the entitlement worked in accommodation, food and retail.

It also looked at the wellbeing of NDIS recipients, who reported an improvement in general and mental health two years after receiving funding and a jump in employment after year four.

Other trends that have become apparent over the last two decades include a decline in people aged 15 and over trying alcohol and a drop in the number of people getting married with a corresponding increase in de facto couples.

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