The terms of reference of the Royal Commission into Aged Care Quality and Safety (the Commission) includes consideration of the future challenges and opportunities for delivering accessible, affordable and high quality aged care services in Australia in the context of changing demographics and preferences, in particular people's desire to remain living at home as they age.

In its interim report the Commission identified a pattern of societal neglect surrounding aged care that has left services fragmented, unsupported and underfunded. There is a need for significant reform to improve the quality of aged care and ensure older Australians have access to the care they need.

Understanding how potential reforms might impact on the operations of the sector, its workforce and required levels of funding are important parts of the overall picture of the future of aged care in Australia. With that in mind, the Royal Commission asked Deloitte Access Economics to develop this detailed economic scenario model of the aged care sector to help inform the Commission’s work.

The model is designed to consider the impact of policy change over the period to 2050 presented relative to a baseline scenario defined by the assumption that current aged care policy will remain unchanged. It’s acknowledged that policy will change over time which is why the baseline scenario should be viewed as a neutral reference case rather than an attempt to accurately forecast the future of the sector. The baseline does not attempt to incorporate policy changes that have or may come about as a result of Coronavirus (COVID-19) on the aged care sector or the broader economy.