To live in the consciousness of the Atman is to live in the calm, unity and peace that is above things and separate from the world even when pervading it. But for the psychic consciousness there are two things, the world and itself acting in the world. The Jivatman has not come down into the world, it stands above, always the same—supporting the different beings, mental etc. which act here. The psychic is what has come down here—its function is to offer all things to the Divine for transformation.
Ref: Letters on Yoga Vol. I