For years, South Africans have associated the term ‘black tax’ with the responsibility of supporting extended family, according to Buhle Nxumalo, financial adviser at Alexforbes.
She says this reflects the country’s historical and socio-economic realities and remains relevant today. But South Africa’s current economic pressures are creating a broader phenomenon that extends across race and income levels: the growing financial burden placed on those who are expected to support multiple family members.
“High unemployment, rising living costs, longer life expectancy and ongoing economic uncertainty have created a growing group of people carrying what can be described as the ‘Earner’s Tax’.
This is an informal but significant financial obligation borne by those who are often the primary or only income earners in their families,” she says.
Unlike formal taxes, she says this cost is not legislated. It appears in monthly transfers to parents, school fees for siblings, rent for unemployed relatives, groceries, medical expenses and emergency financial assistance. While these obligations are often rooted in care and responsibility, they can place sustained pressure on personal finances.
For many households, one income is expected to stretch across several generations.
The scale of this responsibility is reflected in Old Mutual’s 2025 Savings & Investment Monitor, which found that the proportion of households supporting multiple generations rose from 41% in 2024 to 44% in 2025.
The issue is particularly significant for younger South Africans, who are increasingly caught between helping family members today and trying to build financial security for tomorrow.
According to 1Life Insurance’s third annual Youth Generational Debt Survey, conducted in May 2026, 67% of respondents associate generational debt with debt being passed on to children or dependents, while 27% associate it with “black tax” and broader family financial obligations. Around 30% say debt and financial pressure are preventing them from saving for long-term financial security.
Yet the findings also point to a generation that is not simply accepting the cycle. Nearly 70% of respondents associate generational debt with passing financial burdens on to future generations, while almost two-thirds believe life insurance plays an important role in building generational wealth.
From family responsibility to generational wealth
The challenge is that the financial responsibility carried by one generation can have consequences for the next.
When a significant portion of an income is used to support parents, siblings or other dependents, there may be little left to build the assets that could eventually benefit the next generation. This creates a difficult paradox: an income earner may be helping their family survive today while simultaneously reducing their ability to build financial security for tomorrow, says Nxumalo.
The 1Life findings illustrate this tension. While 47% of respondents say they do not intend to leave debt behind for the next generation, many are already finding that debt and family obligations are limiting their ability to save and invest.
This suggests an important shift in the way young South Africans are thinking about money. The goal is increasingly not simply to be the family member who can provide financial assistance when needed, but to build a financial position that allows them to support their families without reproducing the same cycle of dependence.
Hayley Parry, money coach and facilitator at 1Life’s Truth About Money programme, says this represents a meaningful change in financial consciousness.
“South Africans are increasingly viewing financial security through a generational lens. People are no longer only focused on surviving month to month; they are thinking more intentionally about the kind of financial future they leave behind for their children and families,” says Parry.
The distinction is important. Generational wealth is not only about leaving behind property, investments or cash. It can also mean leaving behind fewer liabilities, better financial knowledge and a stronger financial foundation, says Parry.
For an income earner, building personal financial resilience is therefore not necessarily an act of selfishness. It can be one of the most practical ways of supporting the next generation.
The financial planning challenge
According to Nxumalo, the central tension for income earners is balancing immediate support with long-term financial security.
Supporting family needs today often means delaying the financial steps needed to ensure sustainability in the future. This trade-off is not theoretical. It appears in everyday decisions where urgent needs take priority over long-term planning, she says.
Nxumalo says four areas are commonly affected:
1. Delayed wealth-building
Money used to support others is money that cannot simultaneously be used to build personal financial security.
This can include:
- Emergency savings
- Retirement contributions
- Investments
- A home deposit
- Paying down personal debt
Over time, the impact can be significant. Early contributions to savings and investments benefit from long-term growth. When these contributions are delayed, the cost can extend well beyond the amount that was initially given to a family member.
2. Reduced financial resilience
Many income earners effectively become the family’s financial safety net.
Every unexpected expense can fall on one person, leaving little room to build a personal financial buffer. Without sufficient savings, a job loss, illness or economic disruption can quickly escalate into a crisis.
The risk is not only higher spending. It is the missed opportunity to build resilience.
3. Constrained life choices
Support obligations can influence major life decisions.
These may include:
- Remaining in a high-paying but unsustainable job
- Postponing further education
- Delaying starting a family
- Avoiding business ventures
- Choosing careers or locations based mainly on income
The financial cost is clear, but the broader impact on life choices can be equally significant.
4. Emotional and relational strain
Financial support can alter family dynamics.
Income earners may experience pressure, guilt or frustration, while dependants may develop expectations that become increasingly difficult to manage. Support that begins as an act of care can become an obligation without clear limits.
Over time, financial stress can become emotional stress.
When support becomes harmful
Supporting family is not inherently negative. In many South African households, it is an important expression of responsibility and solidarity.
It becomes problematic when it undermines the income earner’s own financial stability.
Warning signs include:
- Supporting others through debt such as credit cards or loans
- Having no emergency savings because of ongoing commitments
- Consistently delaying long-term goals such as retirement planning
- Open-ended support with no defined limits
- Increasing dependence rather than greater independence
- Feeling unable to decline requests
These indicators suggest that the current approach may not be sustainable.
Nxumalo says a more balanced approach is structured support.
“For example, committing to a specific amount for a defined period and purpose. This provides clarity and protects both the income earner and those receiving support. Without this balance, there is a real risk that the ability to provide support will eventually decline,” she says.
That distinction matters. If the person providing support becomes financially distressed, the entire family network can become more vulnerable.
A new reality for financial planning
Nxumalo says traditional financial planning often assumes individuals are responsible for themselves, their partner and their children.
For many South Africans, that model no longer reflects reality.
Financial plans need to account for broader family responsibilities, longer periods of dependency and the reality that one household may be supporting several generations.
“The Earner’s Tax may not appear on a payslip, but it has a direct impact on cash flow, savings, investment capacity and retirement outcomes. It also influences how wealth is built and transferred across generations. Recognising this reality is not about discouraging support. It is about ensuring that support can be sustained over time,” she says.
This is where the conversation about generational wealth becomes particularly important.
It is difficult to build wealth when every available rand is committed to solving an immediate financial problem. Equally, it is difficult to break a cycle of generational debt if the next generation inherits not only the responsibility to support others, but also the debt created by that support.
The answer is not to abandon family responsibilities. It is to make them sustainable.
Managing the earner's tax
While supporting others is often unavoidable, it does not need to come at the expense of personal financial security. The focus should be on intentional and structured support.
Include support in your budget
Treat financial assistance as a planned expense. Allocating a fixed monthly amount creates clarity and helps manage expectations.
Prioritize your own financial security
Long-term commitments such as retirement savings, emergency funds and appropriate insurance should remain priorities. Securing your own future reduces the risk of becoming financially dependent later in life.
Set clear boundaries
It is important to be realistic about what you can afford. Communicating limits clearly helps prevent misunderstandings and protects relationships.
Being financially responsible does not mean being unwilling to help. It means recognising that there is a limit to what one income can sustainably carry.
Distinguish between once-off and ongoing needs
Not all financial requests are urgent or carry the same importance. Identifying whether support is temporary or recurring helps determine the appropriate response.
A once-off medical emergency requires a different approach from a permanent monthly financial shortfall.
Support independence where possible
Assistance should ideally enable long-term self-sufficiency.
This may mean funding education, skills development or job-seeking efforts rather than providing indefinite cash support.
The objective should be to help move a family member towards independence rather than creating another permanent financial obligation.
Build an emergency fund
Having three to six months of essential expenses set aside can prevent an unexpected cost from immediately becoming debt.
For income earners supporting several people, this buffer is particularly important because their financial responsibilities extend beyond themselves.
Protect your income
For those supporting multiple people, their income is one of the most important assets in the household.
Life cover, disability cover, income protection and an up-to-date will can form an important part of a financial plan, helping protect dependants against the financial consequences of losing an income earner.
Encourage open conversations
Families need to talk honestly about money.
Discussing financial realities can help align expectations, encourage shared responsibility and reduce the pressure placed on one person.
Seek professional help
A financial planner can help assess the impact of ongoing family support and ensure that it is incorporated into a broader financial plan.
The objective is not to eliminate generosity. It is to ensure that generosity does not come at the cost of financial collapse.
Being an income earner reflects commitment and care. For many South Africans, it is also a source of pride.
But there is a difference between being financially supportive and becoming financially responsible for everyone.
The real challenge is to move from reactive support to sustainable support. That means knowing what you can afford, setting boundaries, protecting your income, reducing debt and continuing to build your own financial future.
The uncomfortable truth is that an income earner who sacrifices their entire financial future to support everyone else may eventually have nothing left to give.
The objective should not be to give the most money to the most people. It should be to build enough financial resilience to support others without creating another generation of financial dependence.
As Nxumalo says: “By protecting their own financial position, they are better able to support others over the long term. Balancing present responsibilities with future security is not always easy, but it is essential for lasting financial wellbeing.”
dieketseng.maleke@nationalmg.co.za