Our merit is merely God crowning his own graces.
I’ve written before about the rich young ruler. He asked Jesus (Matthew 19:16-24) how to “have eternal life.” Jesus replied: “keep the commandments” and “sell what you possess and give to the poor, and you will have treasure in heaven” (nothing about “faith alone” there). The follow-up passage in Luke is equally interesting:
Luke 18:26-30 (RSV) Those who heard it said, “Then who can be saved?” But he said, “What is impossible with men is possible with God.” And Peter said, “Lo, we have left our homes and followed you.” And he said to them, “Truly, I say to you, there is no man who has left house or wife or brothers or parents or children, for the sake of the kingdom of God, who will not receive manifold more in this time, and in the age to come eternal life.”
This is also biblical evidence in favor of the evangelical counsels, and the heroic sacrifices of priests, monks and nuns, and any individual who voluntarily renounces anything good in and of itself, for the sake of the kingdom.
St. Paul teaches: “The unmarried man is anxious about the affairs of the Lord, how to please the Lord; but the married man is anxious about worldly affairs, how to please his wife” (1 Corinthians 7:32b-33) and says that the single state would secure an “undivided devotion to the Lord” (1 Corinthians 7:35).
The most striking thing in the passage above (one of many) is how the acts are directly tied to salvation itself. It starts with an inquiry about salvation and how to attain it, and ends with a proclamation that those who do the things mentioned will receive eternal life.
But it’s not a denial of the importance of accompanying faith (I hasten to add). I would contend that faith is clearly implied in the act or forsaking things in order to follow Jesus as a disciple (i.e., in the context of His three-year ministry).
That said, what is specifically mentioned is leaving things in order to follow Jesus (house, wife, brothers, parents, children) and “for the sake of the kingdom of God.” These are, of course, good works, but of a particular kind: penance or renunciation or voluntarily suffering for the kingdom. And they are meritorious: with rewards not only in heaven but also “manifold more in this time.”
All of this is very Catholic indeed, over against Protestant teaching, which renounces merit, good works as directly tied to justification and salvation (in grace and with faith), and also the notion of penance and redemptive suffering. But there it is in Scripture, and it is not an uncommon theme at all, as many other similar “un-Protestant” sayings of Jesus illustrate:
Matthew 7:19 Every tree that does not bear good fruit is cut down and thrown into the fire. (cf. 3:10; Lk 3:9)
Matthew 7:21 Not every one who says to me, `Lord, Lord,' shall enter the kingdom of heaven, but he who does the will of my Father who is in heaven.
Matthew 7:26-27 And every one who hears these words of mine and does not do them will be like a foolish man who built his house upon the sand;  and the rain fell, and the floods came, and the winds blew and beat against that house, and it fell; and great was the fall of it.
Matthew 10:22 (cf. Mt 24:13; Mk 13:13) . . . But he who endures to the end will be saved.
Matthew 16:27 For the Son of man is to come with his angels in the glory of his Father, and then he will repay every man for what he has done.
Matthew 25:20-21 And he who had received the five talents came forward, bringing five talents more, saying, `Master, you delivered to me five talents; here I have made five talents more.'  His master said to him, `Well done, good and faithful servant; you have been faithful over a little, I will set you over much; enter into the joy of your master.'
Matthew 25:31-36, 45-46 "When the Son of man comes in his glory, and all the angels with him, then he will sit on his glorious throne.  Before him will be gathered all the nations, and he will separate them one from another as a shepherd separates the sheep from the goats,  and he will place the sheep at his right hand, but the goats at the left.  Then the King will say to those at his right hand, `Come, O blessed of my Father, inherit the kingdom prepared for you from the foundation of the world;  for I was hungry and you gave me food, I was thirsty and you gave me drink, I was a stranger and you welcomed me,  I was naked and you clothed me, I was sick and you visited me, I was in prison and you came to me.' . . .  . . . `Truly, I say to you, as you did it not to one of the least of these, you did it not to me.'  And they will go away into eternal punishment, but the righteous into eternal life."
John 5:29 . . . those who have done good, to the resurrection of life, and those who have done evil, to the resurrection of judgment.
St. Augustine said that our merit was merely God crowning his own graces. That’s what the Catholic Church teaches. It doesn’t come from us; it comes from God, giving us the grace to do any good thing.
Catholics don’t separate works from faith, as if it were totally a different category. If faith saves, and “faith without works is dead,” then obviously works are part of the whole equation. But we do agree with Protestants that works alone — absent God’s enabling and saving grace — save no one (the heresies of Pelagianism and Semi-Pelagianism).