State transfer in the form of social grants can be useful not only in ameliorating the inequality-inducing
effects of growth, when articulated correctly; it may also usher in human capital investments at the microlevel
and inclusive growth outcomes in the larger economy. Using Income and Expenditure Surveys
(IESs), and the standard measures of poverty and inequality in a serial analysis, I assess the importance
and policy implications of South Africa’s systems of social grants on income in the past 15-years. Crossentropy
adjustments are implemented on each year’s sampling weights to ensure intertemporal
consistency, as well as attempted item matching of the income variables to ensure definitional
comparability in the series. Growth Incidence Curve (GIC) is used to assess the nature of growth, as well
as identifying the impact of social grants on household’s income dynamics for the period under review.
The results show that State Transfers in the form of social grants has become a structural necessity in
household’s income composition, especially the poor. Hence, innovations around social transfer policies
involving developmental drivers- such as education, employment, and public saving schemes - may be
helpful in bringing about growths with more inclusive potentials.