The number of disability grant recipients in South Africa is rising sharply, largely because of the AIDS pandemic. Now that the government is ‘rolling out’ antiretroviral treatment, many people living with AIDS stand to lose their grants as a result of restored health. Given South Africa’s high unemployment rates and lack of adequate welfare provision for the unemployed, those who do not find work will suffer a significant decline in income. They thus face a stark choice: to go on antiretroviral treatment and lose their disability grant, or avoid treatment and keep the grant for the rest of their (shorter) lives. Some may opt to start treatment, and then when the disability grant expires, discontinue their medication in order to become eligible once more for the disability grant. Such behaviour will foster drug resistance, thereby undermining the antiretroviral treatment rollout and exacerbating the AIDS pandemic. This is a direct consequence of a welfare system that does not provide support for the unemployed and that places poor people in a situation of having to choose between health and income. Replacing the disability grant with a basic income grant would help address the problem.