Ice use has in part been blamed for a rise in the number of methamphetamine and ecstasy drug users with a mental illness.

Higher rates of ice use in Australia is partly driving a rise in the number of methamphetamine drug users diagnosed with a mental illness.

Data from the 2016 National Drug Strategy Household Survey released by the Australian Institute of Health and Welfare (AIHW) on Thursday, shows 27 per cent of people who used an illicit drug within a 12 month period were diagnosed with or treated for a mental illness - an increase from 21 per cent in 2013.

Rates of mental illness were particularly high for methamphetamine and ecstasy users.

In 2016, 42 per cent of methamphetamine users had a mental illness, up from 29 per cent in 2013. The rate of mental illness among ecstasy users also rose from 18 per cent to 27 per cent.

A couple of factors may be contributing to this trend, including the growing numbers of people abusing ice, says AIHW spokesperson Mr Mathew James.

"Over that time period between 2010 to 2016 there's been a big rise in the share of methamphetamine users who use ice as the main form; it grew from 22 per cent in 2010 to 57 per cent in 2016," Mr James told AAP.

"Ice users tend to use the drug quite frequently; 32 per cent are using it at least weekly," he said.

"So the big rise in diagnosed or treated mental illness among methamphetamine is probably, at least in part, to that shift towards ice."

However it's too hard to say if the drugs are causing mental illness or vice versa, says Mr James.

"Drug use is a complex issue and it's difficult to determine to what degree drug use causes mental health problems and to what degree mental health problems give rise to drug use."

Similarly, the report reveals a complex relationship between employment status and drug use.

"For example, people who were unemployed were about three times as likely to have recently used methamphetamines as employed people and about two times as likely to use cannabis or smoke tobacco daily," said Mr James said.

On the other hand, employed people were more likely to use cocaine than those unemployed.

Dr Kym Jenkins, President of the Royal Australian and New Zealand College of Psychiatrists, says the report findings are not surprising but highlight the need for further longitudinal studies.

"It is very understandable for some people with mental illness that they may seek to self medicate with illicit substances and we know with things like methamphetamine they can cause people to feel paranoid," Dr Jenkins said.

But it's still not known what is driving what, says Dr Jenkins.

Key Findings State by State

* Highest rate of cannabis use in 2016 - NT
* Highest rate of ecstasy use - WA
* Highest rate of methamphetamine use - WA
* Highest rate of cocaine use - NSW.