While levels have eased, they are still high and experts believe ongoing monitoring is needed to understand the longer-term impact of the pandemic.

"Adolescence and young adulthood is a critical period in a person's life. Young people often experience rapid physical, social and emotional changes in a time where they are transitioning from dependence to independence," said AIHW Sally Mills.

"This is a time when young people are finishing school, pursuing further training and education, entering the workforce, moving out of the family home, and forming relationships."

The report Australia's Youth drew together research from across the country carried out before and during the pandemic.

Findings from the Australian National University's COVID-19 Impact Monitoring Survey Program showed COVID-19 had a negative impact on the mental health of all Australian adults, particularly those aged 18 to 24.

The impact was lower in regional areas, likely due to a lower economic impact of restrictions and lower infection rates than capital cities. And not surprisingly, Victorian adults of all ages had higher rates of psychological distress than the rest of Australia.

Despite lockdowns easing, the psychological distress score was 21 per cent higher than before the pandemic, and potentially even higher between April and August during the worst of the lockdowns.

Among the predictors of psychological distress was job loss, with young people aged 15 to 24 bearing the brunt of job losses with many working casual jobs in heavily-impacted industries such as hospitality.

The proportion of young people aged 15-24 not in education, employment or training rose from 8.7 per cent in May 2019 to 12 per cent in May 2020 following the introduction of COVID-19 restrictions. The rate dropped to 11 per cent in February 2021, similar to a year before.

The loss of employment, paired with many young people's ineligibility for JobKeeper payments because of the short term casual nature of their jobs, also put pressure on their ability to pay their rent and/or mortgage on time.

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More than a quarter of young people said they could not pay their rent and/or mortgage on time in the previous three months.

The report also found COVID placed intense pressure on the social connectedness of young people, hampered their education and put some at increased risk of domestic violence.

"While some effects of COVID-19 on young people are emerging, it is important to note that the full impact is complex and not yet fully understood. The effect of COVID-19 can also be dynamic - outcomes change quickly (for instance, mental wellbeing and social connectedness) when conditions change (such as introducing or easing restrictions)," Ms Mills said.

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