Bob Burns, who has been lobbying the Government on several pension issues, said the funding was "really only making up lost ground". He said the amount of income pensioners had to survive on was "hopelessly inadequate" and would remain so until "something more appropriate" was done.

Narre Warren pensioner Ray Pendlebury said he would prefer the money be paid in fortnightly instalments rather than as a one-off bonus.

But La Trobe MP Mr Wood welcomed the news.

"At last a welcome - albeit overdue - relief for pensioners," he said.

"Thanks to all the pensioners who've made their voices heard. Let's keep pushing for an increase to the base rate so that pensioners can be confident of more money in the long term."

National Seniors Australia chief executive Michael O'Neill also welcomed the payment.

"The Government has listened to the concerns of our most vulnerable older Australians and they've come to the table," Mr O'Neill said.

The one-off pensioner payment is part of the Government's $10.4 billion economic stimulus package announced last week and aimed at boosting consumer spending. The Government is also undertaking a wide-ranging review of pension payments due to be completed early next year.