Policies of deterrence, including the use of detention and temporary visas, have been widely implemented to dissuade asylum seekers from seeking protection in Western countries. The present study examined the impact of visa status change on the mental health of 97 Mandaean refugees resettled in Australia. At the time of the first survey (2004), 68 (70%) participants held temporary protection visas (TPVs) and 29 (30%) held permanent residency (PR) status, whereas by the second survey (2007), 97 (100%) participants held PR status. We tested a meditational model to determine whether the relationship between change in visa status and change in psychological symptoms was mediated by change in living difficulties associated with the visa categories. The conversion of visa status from TPV to PR status was associated with significant improvements in PTSD and depression symptoms, and increases in mental health-related quality of life (MHR-QOL). The relationship between change in visa status and reduced PTSD and depression symptoms was mediated by reductions in living difficulties. In contrast, the relationship between change in visa status and increased MHR-QOL was not mediated by changes in living difficulties. These results suggest that restriction of rights and access to services related to visa status negatively affect the mental health of refugees. Implications for government policies regarding refugees are discussed.

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