This paper explores the impact of outcome-based funding on service delivery within employment services for people with serious mental illness. It draws on a case study of a policy change in the provincial disability support program in Ontario, Canada where funding for employment programs and services was changed from a fee-for-service to an outcome-based model. The findings highlight that the financial imperative for programs to meet employment targets in order to secure their funding has shifted the focus away from the provision of pre-employment supports to job development and job placements. However, there remains little attention to job matching and career development, and there is concern about access to services among those with complex barriers to employment. There is a need to reconcile tensions between the goals of outcome-based funding and on-the-ground service delivery to promote ongoing innovation in employment services for people with serious mental illness.