Young people from low income families will receive an allowance of £42 if they undertake at least 30 hours of volunteering a week under a pilot scheme announced in last week's Budget.
The £5 million Young Volunteer Challenge begins in May and is intended to involve 1,200 young people aged between 18 and 21.
Participants will also receive a £750 reward if they complete nine months of volunteering and could qualify for housing benefits.
The scheme is targeted at young people whose families have an income of £13,000 or less.
Home Secretary David Blunkett said: "This pilot is clear evidence of our commitment to increase the numbers of people who volunteer, especially those who wouldn't normally consider doing so or who don't have the financial means."
See Budget story, p9.