Studies show that social workers in many countries engage in policy practice at various levels and through diverse strategies. Recent scholarship has even offered some important conceptual frameworks for explaining policy practice. What is still missing is an informed analysis of the impact of the broad transformation social work has undergone in recent decades on the involvement of social workers in the policy arena. Drawing on secondary sources, this article fills this lacuna by providing a theoretical analysis of the broad context of policy practice. As neo-liberalism is the dominant ideology that has reconfigured the political, economic and institutional landscape of social work, the article evaluates its impact on social workers’ engagement in the policy arena. The article subscribes to three main features of neo-liberalism: restructuring of the state, culture of marketisation and valorisation of entrepreneurship. Our analysis shows a complex picture in which neo-liberalism has both triggered the need for policy practice but also severely restricted the likelihood for meaningful political actions taken by social workers.