Over recent decades income inequality has increased in many advanced economies (which is attributed to a range of factors), it can be detrimental to achieving macroeconomic stability and growth and some authors believe that it was on e of the main causes of the 2008 global financial crisis. The aim of this paper is to determine the effect, which have social spending on income inequality because this instrument of fiscal policy should play a significant role in reducing income inequality. The selected representative sample consists of 34 OECD member countries in the period 2000-2014. As the dependent variable approximating income inequality is used the Gini coefficient, one of the best known and used measures of income inequality, prepared in accordance with OECD methodology. To approximate the impact of social spending on income inequality the dynamic panel data model is used.