The purpose of this chapter is to investigate the role of social grants in reducing income inequality during the first 15 years of democracy in South Africa. Since the transition to democracy in 1994, the South African government has dramatically expanded this system of social grants. Building on an existing but racially biased social security system developed by the apartheid government, the social grant system was expanded to include all races and then, through the 1990s, additional social transfers were instituted.