Many poor households in South Africa rely on social grants for their survival, forcing the government to spend on the programme, to the detriment of other socioeconomic programmes necessary for poverty alleviation and economy growth. This study investigated the impact of the South African social assistance policies and programmes on the human capacity development of beneficiaries, especially households affected by HIV/AIDS, residing in informal settlements. Following a qualitative approach, exploratory and case study techniques were used to collect and analyse data. In-depth interviews and observations at research sites uncovered rich data elucidated by social capital theory and the capability approach. The thesis commenced with social assistance as implemented in OECD and BRICS countries, including South Africa. The notion of human capacity development, as linked to social assistance, poverty alleviation and economic growth, was presented. Conditional social programmes directed at human capacity development via educational assistance were contrasted with universal social assistance systems. Findings revealed that South Africa, despite its low level of economic growth, has a welldeveloped, selective social assistance system. Social grants assist beneficiaries to meet urgent needs, such as food and transport to hospital and for job seeking. It is insufficient to meet other basic needs, including capacity development. There is a shortage of educational facilities and training programmes in poor communities, which sometimes exclude adult men and youth without Grade 12. There is no guarantee of a job or business opportunities for graduates from skills development centres. Many who have completed their training are placed in entry-level jobs that earn salaries below the social grant exit requirements. Recommendations to increase the array of social grant instruments and to introduce conditional grants for vulnerable adults were made. In particular, the provision of scholarships to needy youths and adults was recommended, augmented by more educational facilities in poor communities, more training programmes, and the establishment of structures that will provide decent job placement and business opportunities for graduates. Urgent provision of decent housing for the poor and improvements in public health infrastructure, roads, water and electricity, in order to facilitate the human development of needy people is further needed. / Development Studies / Ph. D. (Development Studies)