THE government is introducing a new Progressive Wage Credit Scheme (PWCS) to co-fund the wage increases of lower-wage workers between 2022 and 2026, said Finance Minister Lawrence Wong on Friday (Sep 18).

It is also enhancing the Workfare Income Supplement to further boost lower-wage workers.

To co-fund the wage increase, the government will set up a PWCS fund with an initial injection of S$2 billion this year, which will provide certainty of funding for the wage increases over the next 5 years.

For workers earning up to S$2,500, the co-funding rate will be 50 per cent in the first 2 years, 30 per cent in the next 2 years, before tapering to 15 per cent in 2026.

For workers earning above S$2,500 and up to S$3,000, the co-funding rate will be 30 per cent in the first 2 years and 15 per cent in 2024.

Wong said that in view of the uncertain economic conditions in the immediate term, the government will provide some support for the wage increases of workers earning above S$2,500, and up to S$3,000 for those who marginally miss the first wage tier. This extra support will be given from 2022 to 2024.

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The payouts will be made in the first quarter of the following year.

As for the Workfare Income Supplement, the qualifying monthly income cap will be raised to S$2,500 from S$2,300, from Jan 1, 2023.

There will also be a new minimum income criterion of S$500 per month to encourage part-timers and casual workers to take up regular, full-time work.

Annual Workfare payouts will also be raised across ages: those aged 35 to 44 will receive a maximum of S$3,000; those aged 45 to 59 will receive a maximum of S3,600; those aged 60 and older will receive a maximum of S$4,200.

Workfare will also be extended to younger workers aged 30 to 34, with a maximum annual payout of S$2,100, and persons with disabilities will receive a maximum annual payout of S$4,200 regardless of age.

The enhanced Workfare is expected to benefit more than 500,000 workers, Wong said. Through the combination of progressive wage schemes and Workfare, the incomes of lower-wage workers will likely grow faster than the median wage growth over the coming decade, he added.

The government expects to spend an average of S$1.8 billion per year over the next 5 years, or S$9 billion in total for the PWCS and the enhanced Workfare.

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