The Scottish Government and local authorities are investing £40 million to mitigate the effects of the abolition of council tax benefit.
The UK Government is scrapping the council tax benefit system from next week as part of its wider programme of welfare reform.
Instead, councils are being asked to introduce their own council tax reduction schemes, but with a 10% cut in funding.
Finance Secretary John Swinney said support from the Scottish Government and Scottish councils would protect around 560,000 people by bridging the funding gap.
Mr Swinney said: “Hard-working and vulnerable people are having to bear the brunt of these Westminster benefit cuts.
“To ensure households across Scotland do not face additional burdens the Scottish Government and Scotland’s councils are providing £40 million in 2013/14 to ensure that around 560,000 people in Scotland are protected from this reduction.
“Whilst council tax bills will be increasing in many areas of England as a result of benefit cuts, we are using the limited resources we have to ensure vulnerable people do not have to face increasing bills.”
The UK Government’s welfare reforms also include the controversial “bedroom tax”, which will see a reduction in housing benefit for people under-occupying socially rented homes.
The Scottish Government has given £2.5 million to social landlords to help people affected by housing benefit changes.
Meanwhile £5.4 million has been given to organisations such as Citizens Advice in anticipation of greater demand for such services.