Published on 6 Oct 2025

Supplementary Impact and Cost Benefit Analysis of the new model for regulating aged care

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11 LINDA 1x1 PORTRAIT 1
Linda Gyorki Director Consulting (AU) Contact me
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Milo McKay Consultant Contact me
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Sarah McDowell Regulatory Lead (AU) Contact me

Allen + Clarke delivered a supplementary impact and cost benefit analysis for the Australian Government's proposed aged care reforms following a Royal Commission that identified "high levels of substandard care." Our team provided qualitative assessment and economic modelling that demonstrated a net community benefit from new regulatory interventions, supporting the Aged Care Bill 2024 and associated reforms. 

Key Takeaways:

 

  • Our economic analysis demonstrated a clear net benefit to the Australian community from implementing new regulatory interventions in aged care. 

  • We combined qualitative assessment with quantitative economic modelling to evaluate multiple reform options. 

  • Our analysis directly supported the Aged Care Bill 2024, improving outcomes for aged care recipients across Australia. 
Read the impact analysis here
The publicly available supplementary impact analysis demonstrates Allen + Clarke's our ability to deliver rigorous cost-benefit analysis that supports meaningful policy change.

The need for a thorough understanding of impacts and costs

Following the Royal Commission into Aged Care Quality and Safety, the Australian Government Department of Health, Disability and Ageing began regulatory reform in aged care. The Commission found the existing regulatory framework was contributing to "high levels of substandard care" in Australia's aged care system, necessitating changes. The Department engaged Allen + Clarke to analyse the impacts of proposed regulatory reforms to support government decision-making on this sensitive and important issue.

The aged care system serves hundreds of thousands of older Australians. As a result, the Department needed a thorough understanding of both qualitative impacts and quantifiable costs and benefits across multiple reform options to build a compelling case for legislative change.

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Our Approach

Our team brought together expertise in regulatory impact analysis, health economics, statistical modelling, and aged care policy. This multidisciplinary approach enabled the team to address both the human and economic dimensions of the proposed reforms.

We developed an analytical approach to evaluate the full spectrum of impacts from the proposed regulatory interventions:

  • Qualitative analysis - we assessed non-monetary impacts on aged care recipients, providers and the broader community. 

  • Economic modelling - our team developed detailed cost benefit models that quantified both direct implementation costs and long-term economic benefits. 

  • Comparative assessment - we evaluated multiple reform options against the status quo to identify the most beneficial regulatory approach. 

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What We Found

The analysis identified that implementing new regulatory interventions would deliver a net benefit to the Australian community. Our team carefully documented both costs and benefits for each reform option, providing decision-makers with evidence of which approaches would deliver the greatest value. The economic modelling demonstrated that while reforms would require initial investment, the long-term benefits through improved care quality, reduced harm, and more efficient service delivery would outweigh these costs.

Our findings supported the evidence base for the Aged Care Bill 2024, which was passed by the Australian Parliament on 25 November 2024. Our work supported:

  • Evidence-based legislation - the new Act incorporates regulatory measures proven through our analysis to deliver positive outcomes. 

  • Improved care quality - the reforms address the "high levels of substandard care" identified by the Royal Commission. 

  • Efficient regulation - our analysis helped identify the most cost-effective regulatory approaches, maximising benefit while minimising unnecessary burden. 

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Interconnected coloured pathways forming abstract network diagram