Figure 7: Racial composition of post-tax income groups, 2019

5.4 Inequality in post-government expenditure (post-transfer) income

Post-transfer income refers to income after government transfers (like social security) and expenditure on social services (education and health) have been taken into consideration. Measuring post-transfer incomes allows one to assess the impact of government transfers on primary income (pre-tax and pre government spending income), and whether it is progressive or regressive.

Figure 8 below shows the share of total transfers in grants, education and health that have been allocated to various income groups from 1993 to 2019.18 It depicts the progressive changes made by the South African government: Individualised transfers as a proportion of the national income have consistently increased in favour of the poor.

There has been a relatively rapid growth in transfer income among the bottom 50% who received approximately 12% of the national income.17,18 The middle income group also experienced an increase in transfers from 3.9% in 1993 to 5.3% in 2019.17 This is compared to the 1% of national income received by the top 10%.17 Overall, transfers have been made in the form of cash transfers or in-kind transfers.17