The former Federal Court judge died aged 71 on Friday in the US, where he was being treated for terminal skin cancer diagnosed only seven weeks earlier.

Passionate and committed, Mr Tracey continued working to get a better outcome for older Australians during his treatment in California.

Mr Tracey completed the inquiry's interim report with fellow commissioner Lynelle Briggs, who said his continued work had given her and others hope that he would return fit and healthy in the new year.

"The news of his death was, therefore, a complete shock and absolutely shattering," she said on Monday.

Ms Briggs said the report, to be released on October 31, would be one of the many legacies of a wise and kind man who knew the law like the back of his hand.

"It was Richard who labelled aspects of the aged care system cruel and unkind, after two particularly gruelling days of evidence in Darwin.

"And it was Richard who encouraged me to drive our policy agenda beyond change at the margin to transformative change, given the degree of substandard care that was apparent to us."

New inquiry chair Tony Pagone QC, who was appointed as the third commissioner a month ago, described Mr Tracey's work on the inquiry as solid, selfless and significant.

"He was a remarkable man as everybody who knows him can testify," Mr Pagone said.

After a distinguished law career, Mr Tracey retired in August last year after 12 years as a Federal Court judge before becoming royal commission chair in December.

He served in the Australian Army for four decades and was a former judge advocate general of the Australian Defence Force and president of the Defence Force Discipline Appeal Tribunal.

He was a fundamentally decent human being whose humanity shone most brightly when dealing with the people sharing their often traumatic and distressing experiences with the commission, senior counsel assisting the inquiry Peter Rozen QC said.

The royal commission held a minute's silence to honour Mr Tracey after announcing his death on Monday at the beginning of a Melbourne public hearing examining workforce issues.

Mr Rozen said a picture was emerging of an aged care sector struggling to attract, train, retain and sustain its workforce.

Research commissioned by the inquiry found more than half of all Australian aged care residents are in homes that have unacceptable levels of staffing.

The University of Wollongong researchers called for additional investment in care funding to increase staffing levels to an acceptable standard, although Professor Kathy Eagar also said broader aged care funding reform was needed.

"Retaining the current funding model but just throwing a bit more money at the problem will not solve the problem," she said, adding the system needed to ensure funding for care was actually invested for that purpose.

Australian Associated Press