There is a difference between functional income distribution and personal income distribution. Personal income distribution focuses on how income is divided among individuals in a country. It focuses on why there is a difference in the income distribution between different groups or classes of people. From this analysis, policies can be developed to deal with unequal income distribution.
Functional income distribution deals with the amount of income relative to the factors of production. The factors of production are land, labor, capital, and the entrepreneur. Functional income distribution will look at how much rent a piece of land can get. It will look at how much pay a worker receives. It will also examine how much interest comes from the capital that is invested, and how much profit an entrepreneur can make.
There is some connection between these concepts. If functional income distribution is fair, it is likely that this will also be the case with personal income distribution This is generally good for the economy. The reverse would be the case if there was unjust functional and personal income distribution.