Progressive Wage Credit Scheme

The Progressive Wage Credit Scheme (PWCS), first introduced in Budget 2022, is a strategic initiative targeting the uplift of lower-wage workers in alignment with the broader government objectives of promoting equitable wages through the Local Qualifying Salary (LQS) and the Progressive Wage Model (PWM). Under this scheme, businesses are provided with additional financial support to manage wage increases, thereby balancing the need to control rising labor costs with the imperative of providing fair compensation to employees.

The Government has announced increases in the co-funding levels for wage increments as follows:

• From 30% to 40% for wage increases given in 2025.
• From 15% to 20% for wage increases given in 2026.

This is subject to following conditions being met:

• Employee has average gross monthly wages of up to $3,000 before the wage increase and up to $4,000 after the wage increase.
• Average gross monthly wage increase must be at least $100 in each qualifying year.
• Wage increase in each qualifying year will be co-funded for two years if the wage increase is sustained.

This enhancement highlights the Government’s continued commitment to uplift lower-wage workers’ pay whilst providing an opportunity for businesses to contribute positively to societal goals without adversely impacting their financial position. Not only will this enhancement alleviate the immediate financial burden on employers, more importantly this move aligns with the broader governmental strategy to promote fair wages through LQS and PWM requirements.

This also presents an opportunity for businesses to take advantage of the increased support to implement meaningful wage increases, thereby contributing to a more equitable and resilient economy.