About 1.85 million pensioner households are tipped to receive $210 a year to compensate them for higher prices under the federal government's carbon tax package.
The government will also commit $1 billion over four years to buying credits from farmers and landholders, created by carbon-saving measures such as storing more carbon in soil and revegetation, Fairfax and News Ltd newspapers report.
The 500 big polluting companies will also be able to buy credits in order to offset the amount of carbon tax they pay, but the amount they can buy annually will be capped.
All 3.4 million pensioners, including those on age and disability pensions, will receive assistance to fully cover the average price increases brought by the tax.
Prime Minister Julia Gillard will tell the NSW ALP conference on Saturday that although many Australians are worried about the tax, most people will find they won't be a cent behind.
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She will tell the conference that the facts of the carbon tax plan "will tell a very different story from the one our opponents have tried to tell", with nine in 10 households to receive a combination of tax cuts and increased payments.
The carbon starting price will be $23 a tonne, Fairfax reports.
