Victorians living with mental illness are "just surviving" in a system that depersonalises and denigrates them, a leading mental health advocate has told the royal commission into the state's mental health system.

Key points: Mental health advocates are urging decision-makers to overhaul the system

Mental health advocates are urging decision-makers to overhaul the system Janet Meagher has described the care provided by mental health services in Victoria as vastly different to other medical services

Janet Meagher has described the care provided by mental health services in Victoria as vastly different to other medical services Teresa worried stigma around mental health would impact her career and lead authorities to take her baby from her

Janet Meagher was diagnosed with schizophrenia in the early 1970s and survived 10 years in an abusive institution before becoming a powerful voice for the mental health consumer movement.

She gave a damning assessment of the mental health system on the commission's second day of public hearings, which focussed on the stigma — a word she described as "soft and deflective".

"It's a weasel word. I use discrimination," Ms Meagher said.

"I think it's intolerable to permit or excuse verbal or social exclusion or vilification for those of us who experience mental health issues, but we do.

"It's awful and humiliating and above all disrespectful for those who have to wear the terms crazy, mad, psycho."

Ms Meagher said people with a mental illness did not just experience stigma or discrimination on a personal level, but also within the health system.

Consumers of mental health services who have also been the recipient of other medical interventions, such as oncology or coronary services, reported shocking contrasts between the treatments, she told the royal commission.

Ms Meagher said while caring, humane and supportive approaches were hallmarks of treatment for physical illnesses, the approach with mental illness was different.

"The tone is one of containment, is punitive in nature, and is requiring compliance," she said.

A wide-reaching overhaul of the system was needed to empower mental health consumers to live "contributing lives", Ms Meagher said.

"Currently, we are just surviving. I beg you for a change," she said.

"We need health professionals who encourage and support and enable, not just people who make us conform to medication regimes"

Ms Meagher said mental health professionals had to stop just looking at the mind, and instead also consider physical health and social environment.

"We want people to have healthy bodies, healthy minds and a healthy life," she said.

"I don't think we can have that under the present circumstances."

Mother 'so fearful' authorities would take baby

The commission also heard from, Teresa, who lives with borderline personality disorder.

Despite struggling with mental health and multiple suicide attempts in her teens, Teresa excelled academically and was accepted into medical school.

It was then she started worrying that stigma around seeking mental health treatment could affect her career.

Teresa feared stigma associated with mental illness would impact her career. ( ABC News: Zalika Rizmal )

"I was so fearful that if I started exploring all that, I'd lose everything I'd worked so hard to achieve," she said.

Ultimately, Teresa did not go on to practice medicine, instead forging a successful career in the public service.

When she fell pregnant in 2015, her old concerns about stigma returned, but magnified.

"I was so fearful that my child could be taken away, or that they would say that I was a bad mother," Teresa told the hearing.

A decline in her mental health after the birth of her son led to a stay in hospital, but after she returned to work she did not share the whole story.

"I was able to kind of grab onto one of the stigma-free mental health illnesses," she said.

"I was able to tell people I had postnatal depression, which is one of the ones that kind is a bit more acceptable."

She is now trying to change the narrative around mental health to remove the stigma and show people are more than their disease.

"I want to stand up and say that it's okay to have a brain that doesn't always have your wellbeing at the forefront and you can still be successful and you can have friends and have a family," Teresa said.

The royal commission is accepting submissions until July 5.

It is due to deliver an interim report by November, with a final report due in October 2020.