There is a growing share of older people in the world, European and Croatian populations. The accelerated ageing of the population in the European Union, also in the Republic of Croatia, is a challenge for social work. Care for older people became a key topic in social work of the 21st century. This paper describes and explores daily residence for older people and pensioners, as an example of good practice in the local community, within the framework of deinstitutionalization and development of quality services in the community. The paper shows the theories related to research topic such as the theory of empowerment, the theory of activities and theory of continuity. To understand the importance of daily residence service for older people in this paper, social exclusion, long-term care, deinstitutionalization, and community services are defined and described, followed by the history of daily residence and an overview of past research on daily residence. The effectiveness of the daily residence service for older people is still a very unexplored area in social work. This paper searches the experiences of older people in daily residences for older people and pensioners and how the use of this service affects the lives of older people. Qualitative research included available daily residences for older people in the city of Osijek. Research has shown that daily residence, as social service outside of institution in the local community, enables older people to be socially included, reduces feelings of alienation and isolation, and increases feelings of usefulness and fulfilment by older people. In order to improve the daily residence service, the proposal is to increase user participation in the creation of content that the daily residence service provides, and to ensure the financial sustainability of the provision of this service.