The National Income Dynamics Study offers important new opportunities for exploring the dynamics of poverty in South Africa. This paper provides a largely descriptive overview of the situation of children in South Africa, drawing on the first wave of the panel study. It finds that children and households with children remain disproportionately represented in rural areas under traditional authority, and that children have proportionately lower levels of access to services and adequate living environments than adults. Many children live in households where their parents are absent, for a range of reasons including orphaning and adult migration. These children are cared for almost entirely by relatives, highlighting the importance of extended kinship networks in providing family care, particularly in the context of high mortality and labour migration rates. The income poverty analysis applies a range of poverty lines and finds that children are, on average, poorer than adults. Even using a relatively low poverty line equivalent to R515 per month in 2008, two thirds of children live in income poverty, and this rate increases substantially for children in rural areas. The severity of child poverty is related to the fact that over a third of children live in households where no adults are employed. While social grants are critical for reducing poverty levels, the widest reaching grant – the Child Support Grant – makes a relatively small impact on child poverty because the amount of the grant is set very low. Larger grants, such as the Old Age Pension and Disability Grants, have a far greater effect on reducing child poverty even though they are not intended for children.