The charity Oxfam says it will provide displaced Ambaeans with cash to buy locally produced food, hygeine supplies and pay school fees for the next three months.
The Vanuatu government ordered the evacuation of about 10,000 people from Ambae in August because of volcanic activity.
Many are living in temporary shelters on Maewo and Santo, and it is not clear when they will be permitted to return home.
Mary Baines spoke with Oxfam's Sandra Uwantege Hart.
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People being evacuated from Ambae. Photo: Nixon Garae Tambeana