Johannesburg — MORE than seven million South Africans live in abject poverty on less than R5 a day.

Research by the leading financial think-tank Eighty20 has found that more than 15% of SA's 46.9-million people live well below the largely accepted poverty line of $1, or R7.18, a day.

The research said the poor survived on R5 and others on R10 a day with income mainly from government-sponsored social grants and "piece jobs".

Eighty20 co-founder Illana Melzer said the group undertook the research to study the bottom of the country's economic pyramid to provide companies with strategies for selling to the poor.

The Eighty20 findings come just as South Africa recorded a boom in dollar millionaires. The Merrill Lynch World Wealth Report said the country created 5880 new dollar millionaires last year.

"If you take a household of a mother and a five-year-old child living off a grant of R190 a month and divide it by 30 days and 1½ people, you will find that this household has R4.20 [a person a day] at its disposal," said Melzer.

"It's really starting to dawn on South African marketers that although we live in a country with more than four million affluent people, poverty is real."

Melzer said help from non-governmental organisations and firm family ties, particularly in black communities, provided further relief for the poor.

"The emerging black middle class still have very strong links with family members who are poor. I think the impact of poverty still has an effect -- even on the lives of people who have succeeded economically in South Africa," said Melzer.

Cosatu economist Neva Makgetla said the Eighty20 findings were a true reflection of the growing gap between the rich and the poor.

Makgetla cited this year's 6% increase that MPs received on an average monthly salary of R35000, against the 11% demanded by security guards in their three-month wage strike as an example of the disparities.

"Only the top 1% of income earners get over R30000 a month. Meanwhile, the security guards have been negotiating from base pay of around R1 000 a month, often without benefits or job security," said Makgetla.

"These cases illustrate the broader problem of inequality and mass poverty.

"People at the top seem easily to lose track of the reality of low pay for most workers."

African Harvest Fund Managers economist Adenaan Hardien said that if one used the simple measure of income, then the gap between poor and the rich was getting worse.

"There are signs that it could be getting bigger but I don't have sufficient data," said Hardien.

Among those who survive on less than R5 a day is Makhosazana Ntshangase, a 61-year old grandmother.

She uses her R820 state pension to look after her three unemployed daughters and 11 grandchildren.

"Life has been very hard for us," said Ntshangase.

"Only five of these children get [the R190 child] grants adding to my pension."

Unemployment remains one of the main challenges facing the government.

Last year, Global Insight Southern Africa published figures indicating that the number of desperately poor people had risen from 1.9 million to 4.49million between 1994 and 2002.

Unemployment was identified as the major problem facing millions of poor households.

The official statistics agency, Stats SA, says its data showed that farm and domestic workers remain the lowest-paid -- earning an average of R500 a month.

Since 1994, the government has adopted a social welfare system with public works as its key strategy in poverty alleviation.

Department of Social Development spokesman Lakela Kaunda said nearly 11 million South Africans now received social grants -- including seven million children. "Research has indicated the extent to which social grants have contributed to the mitigation of the negative impact of poverty and unemployment," she said.

Lucky Mochalibane, of the Department of Public Works, said more that 300000 short-term jobs had been created through public works -- but the objective remained a million jobs by the end of 2009.

"We are [also] developing skills because the problem in this country is not so much unemployment as it is lack of skills."