The objective of this article is to explore aspects of the nature and process of exchange in welfare systems. The welfare exchange was the focus of much discussion in the early 1970s stemming from the writings of Titmuss, Pinker and Pruger, and this article starts with a review of that debate. In searching for a more adequate theoretical framework it argues that Gouldner's work on reciprocity, ... [Show full abstract] beneficence and complementarity provides that framework. A model of exchange on an interpersonal level is put forward in which welfare exchanges are viewed as lying along a continuum reflecting the notions of reciprocity and beneficence, with exchanges at each end of the continuum being represented by the two types of complementarity. Dependency, power and disequilibrium are seen as crucial factors in the exchange process, and the total pattern of exchanges is shown to be strongly influenced by the pattern of resource generation and availability within which all exchanges occur. Different types of social services are located at various points along the exchange continuum, and these are seen as reflecting differing relationships between service donors and individual service recipients. The final section of the article is concerned with discussing the influence of the interaction between ‘servers’ employed by agencies and service recipients.