Welfare states are changing. They differ in the way they provide their citizenry with social rights, material resources and support. Contemporary transformations of European welfare states, however, have-apart from significant differences-a common feature: The emphasis of social investment policies. This paradigm aims to equip people with more skills and cognitive capacities to avoid, tackle and/or overcome hardships on their own. In this context, personal welfare services stepped out of their residual role in welfare production and became the centre of a welfare architecture which might be described as Welfare Service States. However, the inherent characteristics of personal welfare services have rarely been the subject of welfare state analyses. As personal welfare services function differently from redistributive benefits, this paper outlines the contours of these new service-based welfare architectures, in which the interaction between street-level bureaucrats and citizens becomes more significant concerning the quality and efficiency of welfare. It sketches out challenges for research on Welfare Service States. Therefore, principal problems of service-based welfare production with regard to the democratic quality of societies will be discussed: Problems of assessment, non-take-up, discretion, managerialism and paternalism.