Background: Suboptimal care transitions of older adults may ultimately lead to worse quality of care and increased costs for the health and social care systems. Currently, policies and financing often focus on care in specific settings only, and neglect quality of care during transitions between these settings. Therefore, appropriate financing mechanisms and improved care coordination are necessary for effective care transitions. This study aims to review all available evidence on financial aspects that may have an impact on care transitions in LTC among older adults. Methods: This systematic review was performed as part of the European TRANS-SENIOR project. The databases Medline, EMBASE (Excerpta Medica Database) and CINAHL (Cumulated Index to Nursing and Allied Health Literature) were searched. Studies were included if they reported on organizational and financial aspects that affect care transitions in long-term care systems. Results: All publications included in this review (19 studies) focused specifically on financial incentives. We identified three types of financial incentives that may play a significant role in care transition, namely: reimbursement mechanism, reward, and penalty. The majority of the studies discussed the role of rewards, specifically pay for performance programs and their impact on care coordination. Furthermore, we found that the highest interest in financial incentives was in primary care settings. Conclusions: Overall, our results suggest that financial incentives are potentially powerful tools to improve care transition among older adults in long-term care systems and should be taken into consideration by policy-makers.