Institutional rearing and structural neglect represent a primary caregiver deprivation experience and fall outside the range of the average expected typical childhood environment. Research indicates that variables related to proximal processes, such as the quality of care, rather than only distal variables, such as the duration of institutionalisation, may affect the adjustment of institutionalised children. The present study involved 100 Ukrainian children aged four‐ to eight‐years old (39 institution reared and 61 family reared) and investigated children's adjustment as a function of two distal variables and one proximal variable: age at admission and the duration of institutionalisation; and the current quality of care, as represented by favourite caregivers' perceived helplessness in the caring task. Attachment shortcomings and cognitive impairments were reported for institutionalised children, independently of the duration of institutionalisation. Low scores for professional caregivers' helplessness were associated with better scores for indiscriminate friendliness and non‐verbal reasoning in children. We conclude that caregiving variables matter and attention needs to be paid to them in order to improve the wellbeing of children in potentially neglectful contexts. Copyright © 2015 John Wiley & Sons, Ltd. ‘The present study involved 100 Ukrainian children aged four‐ to eight‐years old’ Key Practitioner Messages Institutionalisation is a structural neglect condition, increasing the risk for children's social‐emotional and cognitive impairment. Professional caregivers often lack information on how to support children and are faced with challenging working conditions, resulting in an emotionally distant caregiving. The study showed that institutionalised children's attachment and cognitive development are two compromised domains.