Social determinants of health play a vital role in population health. Awareness of household social factors and their impact on health can help health professionals to provide effective strategies in health promotion, especially for children and adolescents showing signs of psychosocial dysfunction. The objective of this study was to explore the association between parents' perceptions of the psychosocial behaviour of their children and the functionality of their household. This cohort study analysed data from the Coordinated Health Care for Complex Kids programme. The sample included 293 parents of children aged 4-17 years with chronic conditions, and from urban, low-income families. Psychosocial behaviour of the child was measured using the Pediatric Symptom Checklist (PSC-17), which included subscales for internal, external, and attention symptoms. Household functionality was measured using the Confusion, Hubbub, and Order Scale. Responses to both assessments were scored in a standard manner. There was a significant association between parents' perceptions of the psychosocial behaviour of their children and the functionality of the home environment. The mean Confusion, Hubbub, and Order Scale scores in the home environment improved from baseline to the first reassessment (the period between the two assessments ranged from 4 to 8 months). Additionally, positive PSC-17 screening results of the children decreased by 11% in the first reassessment. The odds of having a positive PSC-17 screening result also decreased in the first reassessment after receiving interventions. The association between psychosocial dysfunction and household functionality indicates the importance of family-centred care and taking the home environment into consideration when administering health services to low-income children with chronic conditions. This study brings attention to the more hidden factors that influence child mental health, which must be addressed to improve care delivery and child health outcomes. © 2019 John Wiley & Sons Ltd.