During the 1990s’ welfare reforms in China, which highlighted budgetary cuts and decentralisation, local governments in Taizhou, Zhejiang Province, placed self-financing elders in public welfare homes or sent the ‘Three Nos’ (no children, no income and no relatives) elders on public assistance to the emerging non-governmental elder institutions, so as to strategise their public spending. Using ethnographic data collected at the reformed mixed elder homes, this article examines how physical, social and cultural boundary work is constructed and maintained during the everyday interactions of the paying elders and the public clients on welfare. The self-financing customers, through their efforts of distinction, stigmatise the ‘Three Nos’ elders as incompetent, irresponsible and dependent individuals of low quality, and condemn their incompatibility with the regional market prosperity. The elders on public welfare, although marginalised at the institutions, adopt the ideals of collectivity, equality and reciprocity under state socialism as their persistent yet weak resistance. While previous research hails the welfare reforms for introducing diverse funding mechanisms and innovative service models, this study of the antagonistic boundary work at mixed welfare institutions calls for an assessment of the class hierarchy and social inequality that have appeared in the post-reform era.