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For every person paying income tax in South Africa, three social grants are paid out, raising difficult questions about how the country will continue funding its welfare system if economic growth and job creation remain weak.

There are about 14.2 million people registered with the South African Revenue Service as taxpayers, but 5.9 million of those earn below the threshold to pay income tax, meaning only 8.4 million pay income tax.

At the same time about 18.8 million social grants are paid out to nearly 12 million beneficiaries (some people may receive more than one grant, for example a person may receive an old age grant along with a child support grant).

On top of these social grants comes the Covid-19 Social Relief of Distress (SRD) grant. According to a written reply to a parliamentary question from Busaphi Machi of the Inkatha Freedom Party, in the 2025-26 financial year 7.9 million SRD grants were paid out every month.

The chart below shows the number of social grants, the number of SRD grants, the total number of social and SRD grants together, and the total number of taxpayers.

The SRD grant was introduced during the Covid-19 pandemic to cushion the effects of the economic disruption and lockdowns, which imposed enormous and ultimately counterproductive hardship on many of South Africa's poorest people. It was supposed to be a temporary grant but increasingly it seems like it may be permanent.

Once the SRD grant is added to the total number of social grants, the overall number of grants reaches well over 26 million. Since social grants generally support households rather than only the individuals receiving them, comfortably half of South Africans depend on grants in one form or another to maintain their standard of living.

The number of grants paid out by the South African government has increased steadily over the past 30 years.

In 1994, the number of grants paid out was about 2.7 million. This grew to 7.9 million in 2004, around 16.6 million in 2014, and has now, including the SRD grant, reached more than 25 million.

The figures therefore provide a striking indication of the scale of South Africa's welfare system.

The late economist Mike Schussler once described South Africa as having built one of the largest welfare states in the world.

The National Treasury put total spending on social grants during the 2025-26 financial year at about R412 billion, equivalent to 3.6% of GDP.

At the same time, Statistics South Africa estimated that only 16.8 million South Africans were employed, formally or informally, during the first quarter of 2026.

The extent of grant dependency is often read as an indicator of people being dependent on the government, which is correct. But there is also a second dependency loop that is even more important, and that is the extent to which the government is dependent on a very small group of taxpayers. South Africa’s most skilled high-end taxpayers contribute a disproportionate share of all income tax and are globally in demand. If the government strains their purse past a certain point, they could relocate,. The effect would be to crash the sustainability of the grant system, which would in turn crash what popular support remains for the government.

This is a very important but underappreciated check and balance on the populist instincts of the state.