Does your aged care business model still work in 2026?

A new operating reality for providers

Boards are no longer preparing for the Aged Care Act 2024. They are operating under it.

Since 1 November 2025, the Act has replaced previous legislation and introduced a rights-based framework that now shapes how providers govern, report and allocate resources. Compliance is no longer a box-ticking exercise. It is embedded in daily operations.

Registered aged care providers must now meet strengthened Financial and Prudential Standards set by the Aged Care Quality and Safety Commission. Transparent financial management and demonstrably strong governance systems are conditions of registration.

Quarterly Financial Reports and the annual Aged Care Financial Report require detailed disclosure of financial performance, labour costs and service delivery metrics. For many providers, this has shifted compliance from an annual event to a continuous obligation. Finance teams are busier. Boards are scrutinising dashboards more frequently. External advisers are often on retainer.

Marcus Riley, Executive Chairman of BallyCara, says the impact extends beyond reporting mechanics.

“Fundamentally, the challenge is providing what people want and need in a system that remains inflexible and complex.” 

“Additionally the lack of meaningful information to the community about the aged care system and the impact of ever-increasing bureaucratic requirements impact on where resources are allocated and must be factored into planning along with the organisation’s ambitions and objectives.”

Where the pressure is showing

The Act did not create structural fragility in the sector. It exposed it.

Smaller and regional providers often lack the scale or capital base to invest in sophisticated reporting systems, dedicated compliance teams or advanced financial analytics. Larger organisations, by contrast, can distribute compliance costs across multiple sites and absorb additional governance staff within existing structures.

The new reporting regime demands real-time, accurate data across multiple domains. Legislated deadlines leave little margin for error. This increases demand for upgraded accounting systems, internal audit capability and compliance expertise.

Providers are also subject to expanded scrutiny by the Aged Care Quality and Safety Commission and the Department of Health. Governance frameworks are assessed against the strengthened rules on an ongoing basis.

Riley reflects on BallyCara’s preparation: “Our preparation was underpinned by an organisation-wide approach including board, management and staff.” 

“The team planned well, developed effective tools, implemented new systems and processes where needed and communicated to our internal stakeholders about the changes really clearly. However the ongoing reporting requirements are onerous and resource-intensive for all providers.”

For some boards, the emerging question is uncomfortable but necessary: can the current operating model withstand sustained compliance intensity?

Strategic paths providers are taking

Organisations are responding in different ways, and boards are being forced to choose which path aligns with their financial reality and long-term viability:

• Scale and partnership – Larger groups, or organisations that partner with networks, can spread the costs of compliance and governance across multiple services, gaining efficiency through shared systems and expertise.
• Service repositioning – Some providers are reassessing their service mix or regional footprint, shifting toward higher-demand or higher-margin segments that better absorb compliance costs and workforce investment.
• External support strategies – Others are investing in external financial and digital reporting platforms to streamline the Quarterly Financial Report and ACFR process, reducing manual workloads and improving data accuracy.
• Planned transitions or exits – For organisations where scale, capital and workforce constraints are most acute, leadership may consider planned exits, merger pathways or transfer of operations to larger groups. This is not a sign of failure but of responsible leadership in preserving care continuity and community access.

Balancing care quality, governance and sustainability

Compliance with strengthened Aged Care Quality Standards remains foundational. Dignity, safety and quality care sit at the centre of the new framework.

Yet quality outcomes and business sustainability are inseparable. Providers with integrated clinical, operational and financial oversight are better positioned to manage rising compliance demands. Real-time visibility of key performance indicators allows faster adaptation to regulatory changes and market pressures.

For boards, the strategic lens must widen beyond annual budgets. The central question is not whether regulatory requirements can be met this quarter. It is whether the organisation’s scale, cost base and capital structure are fit for the next five years.

Leadership takeaway: adapt with intent

The Aged Care Act 2024 is not merely a regulatory reform. It is a structural test of every provider’s business model.

Leaders who treat enhanced reporting and governance as tools for insight, rather than burdens to endure, will gain a competitive advantage. Data can sharpen decision-making, strengthen financial planning and uncover inefficiencies that were previously hidden.

Under the new regime, viability is no longer assumed. It must be actively engineered.

The question for every board table in 2026 is clear: does your business model still work, or is it time to redesign it with intent?

Sources:

• Aged Care Act 2024, Department of Health, Ageing and Disability. 
• Financial and Prudential Standards, Aged Care Quality and Safety Commission.
• Quarterly Financial Report, Department of Health, Ageing and Disability. 
• Aged Care Financial Report, Department of Health, Ageing and Disability. 
• Quality Standards, Aged Care Quality and Safety Commission.