Purpose: In Sweden, in the wake of deinstitutionalization, in 1995 the responsibility for support regarding accommodation, employment, and an active everyday life for persons with severe mental illness (SMI) became a matter for the municipality's social services. The overall aim of this study was to investigate whether there are differences in functioning and needs among older adults (65+) with severe mental illness (SMI) when divided into Psychosis and Non‑Psychosis groups.

Materials and methods: Data was collected from 5 surveys, and data from national registers. A group of older adults with SMI, with a history of long‑term stays in mental hospitals, was identified anddivided into two groups: Psychosis diagnosis (N = 222) and Non‑Psychotic diagnosis (N = 253).

Results: The level of functioning was significantly lower in the Psychosis group, but at the same time, long periods of institutionalization, regardless of diagnosis category, also contributed to lower functioning scores. Diagnostic group did not explain differences in the proportion of unsatisfied needs; however, the length of institutionalization did.

Conclusions: Although there were diagnostic group differences in functioning, there were no diagnostic group differences in unmet needs, suggesting that social services were responding to individuals' actual level of functioning. In line with the studies by Barton and by Goffman, it can be argued that the long periods of institutionalization were the most decisive factors influencing functional levels.