"What we intend to do is get the economy through this very difficult period," he said after handing out the first cheque to a teacher.
"We need to get money quickly into the system and this is the quickest way."
Abhisit has said the handout is one small part of the Thai governments stimulus package worth around $40bn over the next 3 years.
As the first cheques were distributed, thousands of anti-government demonstrators marched to the prime minister's office in Bangkok demanding the resignation of the government and condemning the payout scheme as an effort to buy support.
Many joined the demonstration after first collecting their handout cheques.
The demonstrators, followers of Thaksin Shinawatra, the former prime minister ousted in a 2007 coup, say Abhisit's government came to power through illegal means and want new elections to be called.
The handout has also been criticised for targeting only about a third of the country's labour force who are already making contributions to the social security fund, leaving out workers in the informal sector, such as farmers and self-employed people, who are not eligible.
|Anti-government protesters say the handout is an effort to buy off voters [AFP]
Abhisit has said the government will launch other programmes that will benefit those left out of the current scheme.
Thailand, Southeast Asia's second-largest economy, has been hit hard by global slowdown and is facing its worst downturn since the 1997 Asian financial crisis.
The Thai economy grew by 2.6 per cent in 2008, but economists expect it to contract by 2.5 per cent this year as a result of plunging global demand for Thailand's exports.
Thailand's finance minister, Korn Chatikavanij, has said he expects the payout programme to boost the economy by 0.2 percentage points.
"It was one of the few things we could do to give a quick, much-needed injection into the local economy," he told Al Jazeera.
"Longer term we are looking at other initiatives, but this was desperately needed."
The thousands of cheque recipients who lined to up receive the handout on Thursday have been bombarded with special offers and promotions from shops and malls hoping to persuade them to spend the money at their premises.
One shopping mall group said it would offer recipients an extra 20 per cent on the value of their cheques if they spent the cash in its shops.