Women, Family and Community Development Minister Datuk Seri Rohani Abdul Karim, who made the announcement, said the Cabinet approved the aid on March 18.
"The ministry is scrutinising the list of Malaysian victims because some of the passengers had dual citizenship," she told reporters after presenting the 2015 excellent service awards to 656 employees of the ministry here.
Rohani said the aid would be handed over to the next-of-kin of the ill-fated flight at a special ceremony to be held by the ministry.
Flight MH17, carrying 283 passengers and 15 crew from Amsterdam to Kuala Lumpur, was hit by a missile over eastern Ukraine on July 17, 2014. All the 298 passengers and crew perished.
Besides 44 Malaysians, the Boeing 777-200 had also carried people from the Netherlands, Australia, Indonesia, United Kingdom, Germany, Belgium, the Philippines, Canada and New Zealand.