Furthermore, as the economy continues to slow down in the midst of the recession, government will find it harder to expand social grants roll out or increase their value, the IRR's 'South Africa Survey' showed.
The bleak picture shows that in 2001 there were 12 494 000 people in employment and 3 993 133 people receiving social grants.
By 2016, however, the number of people receiving grants had increased by 328 percent while those with jobs increased by only 24 percent.
IRR analyst Gerbrandt van Heerden said the numbers were "a recipe for social and political chaos."
"In 2016, there were 15 545 000 people with jobs in South Africa while 17 094 331 people were receiving social grants. As the economy stagnates, and tax revenue slows, demand for more grants will increase. Government will then have to cut other areas of expenditure in order to meet popular demands for more and higher grants. We predict that this will lead to much higher levels of violent protest action."
Van Heerden added that social grants have become "a double-edged sword."
"There is no doubt that the grants rollout did a lot to improve living standards in South Africa. The inability to continue expanding the roll out while also increasing the value of grants will see living standards begin to stagnate and even slip."
"Poor and unemployed people will be worst affected and may suffer new misery as their living standards begin to fall. The consequences for social cohesion will be severe as inequality increases. The pending grants crisis will trigger much suffering and desperation in already poor communities."