The Minister of Social Solidarity and Inclusion Armanda Berta do Santos said funding was necessary to ensure households who had lost all income could cover basic living expenses and were able to bounce back when the crisis had passed.
The country’s state of emergency, active since early April, forced non-essential businesses to close as part of measures to limit spread of the virus.
Some 301,000 households will receive the subsidy next week, Santos said.
She also acknowledged the payment was late, having been promised in April.
The subsidy oath comes as the International Labour Organisation signed an agreement with the Government of Timor-Leste to donate $748,000 to finance household support on Friday.
Timor-Leste has no active cases of COVID-19, all 24 patients have recovered.
The second period of state of emergency comes to an end on 27 May.