Nicola Sturgeon, Deputy First Minister, told MSPs the money will be allocated to councils to ensure no-one needs to fall into arrears or be evicted as a result of the bedroom tax, but they must apply to their local council for payments.
Last week the UK Government agreed to a request from the Scottish Government to lift the cap on Discretionary Housing Payments.
She said it is important that tenants understand the bedroom tax has not been abolished and the only way to get the funds to make up the benefit cut that still stands is to apply for a DHP.
She appealed to MSPs, councils, and housing associations to help ensure people in their communities are aware of the situation and where to get help.
The Scottish Government is now able to provide the £50m required to cover all the cash lost in benefits due to the bedroom tax.
The money will be given to councils who deal with applications for DHPs.
Ms Sturgeon said: "If I have a concern about this, it's people on reading and hearing this they might think they don't need to do anything.
"The bedroom tax has not been abolished, the help is available but the tenant must apply for it."
Labour welcomed the lifting of the cap but said the Scottish Government could have acted earlier and asked for cash to be available for those who suffered a benefit cut last year.
Jackie Baillie MSP said: "We know that the money that was set aside to help those in need last year has not been fully spent.
"On that basis, the Scottish Government should use those funds to help wipe out debt accrued since the launch of the Bedroom Tax and ensure that no vulnerable Scot is left in the red as a result of the Con-Dem government."
Tory MSP Alex Johnstone, said: "What about the tens of thousands assessed as overcrowded on waiting lists? Will this government concentrate resources and effort of these people instead of claiming victory?"
Ms Sturgeon said the UK coalition Government policy "penalising people for being poor."