This article presents Russian and Ukrainian ethnographic case studies on informal payments in state health and education sectors. Overviews of post-socialist transformation can conflate daily informal payments to bureaucrats made by citizens with high-level political corruption. Micro-study analyses frame informal payments within a binary of ex-ante ‘insurance’ or ex-post ‘gratitude’, embedded within an economistic transactional frame. In contrast, this article takes a ‘social function’ approach, examining transactions for what they reveal about parties’ evaluations of personhood, both of the giver and receiver. Street-level bureaucrats and citizens engage in socially grounded negotiation whereby payment is assessed within a needs–means spectrum. The more needy, the smaller the payment; the greater the means, the greater the payment. This is an efficacy-affective form of redistribution and welfare functioning against a backdrop of the dysfunctional state’s refusal to act as social welfare guarantor. It reveals a degree of structuring from below of the qualitative intervention by the state in the lives of citizens, even as distrust and despair in post-socialist societies due to the retreat of the state from its duties towards citizens reach ever higher levels.