This report critically reviews the literature on older care recipient‐directed care arrangements in the United States, United Kingdom, and Australia and highlights the importance to distinguish between Cash‐for‐Care and Self‐Directed Care schemes.

Cash‐for‐ Care schemes typically involve the handing out of cash payments or vouchers to enable care recipients to purchase their own care instead of receiving in‐kind help at home. Ideally, Self‐Directed Care programs, on the other hand, are more holistic, care outcome focused and allow participants to choose among a continuum of care ranging from traditional case management approaches to cash options.

Most of the reviewed literature focuses on Cash‐for‐Care schemes. However, as the more recent research suggests, Cash‐for‐Care programs may not provide the kind of choice that resonates with the preferences of many older people. Indeed, with the exception of Cash‐for‐Care schemes in California and Washington, programs were primarily aimed at and designed for people with disabilities.

Most research indicates that Cash‐for‐Care programs generate either similar or better outcomes, especially in the domains of service satisfaction and self‐determination, with marginal detectable increase in risk, when compared with traditional agency‐directed services. Yet, the research also indicates that positive outcomes are directly linked to appropriate user supports. Care recipients who hire family members as carers derive extra benefit in terms of safety and service satisfaction.