The assessment of mental health consumers' functional independence is a core duty of occupational therapists. Despite the clear impact of cognition on functional outcomes, it is not always routinely assessed. We sought to explore the relationship between cognition and functional independence as well as to describe which areas of performance were most challenging for the sample.Two hundred and twenty-five assessment reports were analysed. These included a “skills summary table” rating independence in a variety of basic and instrumental activities of daily living and a measure of cognition (using the Allen Cognitive Level test (ACL)). Rasch analysis was used to evaluate the internal validity of the “skills summary table” instrument and to construct person measures of functional independence. Correlational and stepwise multiple regression analyses were used to explore relationships between functional independence, cognition, diagnosis, age and gender.Functional cognition explained 30% of the variance in functional independence. The most challenging areas of performance included medication management, money management, housework and cooking.This project confirms the importance of including routine assessment of functional cognition as a key element of functional independence and provides further evidence for the validity of observational assessment of basic and instrumental activities of daily living.