The government will increase its spending on social grants to R111,2bn in the 2012-13 financial year, up from R97,56bn the previous year.
Presenting the 2012-13 budget to Parliament in Cape Town on Thursday, Finance Minister Pravin Gordhan said social spending would comprised 58% of government expenditure next year, up from 49% a decade ago.
The government expects allocations for social assistance to grow to R129bn in 2014-15, at an average annual growth rate of 7,9%.
The increase will cater for the expected increase in the number of social-grant beneficiaries from 15,6-million in 2012-13 to 16,8-million in 2014-15.
The budget provides social grants to almost a third of the population. These help provide largely free services at public health facilities, no-fee schools for 60% of learners, and housing, water and electricity in poor communities.
According to the budget, the average value of the social wage for a family of four in 2012 is about R3940 a month.
In 2011-12, more than R9bn was spent on administrating the "fragmented social security system", Mr Gordhan said. However, he said a new payment model for social grants was being implemented to improve grant administration.
The minister said: "The quality of the poverty reduction we achieve over the decades ahead will depend on our success in broadening development to include historically disadvantaged sectors and communities, as envisaged in our New Growth Path and draft National Development Plan."