Long-term inpatients with severe psychiatric illness such as chronic schizophrenia can be very socially disabled. This makes it difficult for them to move on to more independent living because they lack many of the necessary social and practical skills. Social Economy Therapy (SET) is a practical approach which aims to improve social functioning. On a hostel ward, eight long term inpatients with severe and disabling psychiatric disorders started a SET programme. After two months the social and living skills of several patients were improved and a number were discharged to other accommodation.