The state government on Thursday released its response to last year's Parliamentary Inquiry into Historical Forced Adoption, which found almost 40,000 adoptions were arranged in Victoria from 1958 to 1984.
In that time, some mothers were sent to maternity homes with harsh conditions, forcibly restrained when they gave birth, immediately separated from newborns against their will and pressured or coerced into signing consent forms.
One of the inquiry's key recommendations was to set up a forced adoption redress scheme for mothers.
"No amount of money will change what occurred in the past," Premier Daniel Andrews told reporters.
"No payment can take away the pain and the grief and loss that so, so many women have experienced and live with every day."
A model for the scheme is expected to be laid out by a steering committee within 12 months.
In the meantime, a $500,000 hardship fund will bridge the gap by providing payments of up to $10,000 for mothers of forced adoptions facing exceptional circumstances.
More cash will also immediately go towards providing crisis counselling, as well as optional integrated birth certificates to include the names of the adopted person's natural and adoptive parents.
Attorney-General Jaclyn Symes said women who had their babies taken away from them will not have to provide their own records, with the Department of Justice to seek information when they make a claim.
"The mere non-existence of a record is not a denial of the fact that this happened to someone," Ms Symes said.
At this stage the scheme will only extend to mothers, not children or fathers.
Ms Symes said mothers were the government's primary concern but the steering committee would consider the fallout of the practices on others.
In addition, the Victorian government has committed to remove the statute of limitations for historical forced adoption and Ms Symes said it will advance legislation in the coming year.
Of the inquiry's 56 recommendations, 33 were supported or supported in principle and the 23 others remain under consideration.
Some reforms have already been implemented, such as centralised adoption services, retention of birth certificates, management of adoption records and data publication.
In 2012, former Victorian Liberal premier Ted Ballieu formally apologised for the state's past adoption practices.
Mr Andrews said that moment marked an important step towards reconciliation but the redress scheme was another "make good" measure.
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