"This has been developed to help them speed that process up. It's a choice, they don't have to do it."
The average length of time to resolve a claim is currently 27 months, with 207 claims having been in the system for longer than five years.
"The new settlement offer will be based on an assessment of the claim, and a face value acceptance of the key elements of the claim subject to checking some key facts," Ms Tolley said.
"The financial settlements will be based on claims resolved to date, to ensure as much as possible that there is equity between past and current claims.
"If the offer is over $30,000, claimants will be advised to take legal advice with the ministry paying up to $250 of the cost."
Labour's justice spokeswoman Jacinda Ardern attacked today's offer as insulting to victims, many of whom had suffered horrific abuse while in state care.
Ms Ardern said those who signed on for a fast-track settlement would have to have their claim assessed on historical records.
"Unfortunately many would never have been recorded, while in some cases, records no longer exist."
Another issue was the fact victims won't be able to raise social work practice failures, Ms Ardern said, meaning someone continually abused by a foster carer with the full knowledge of social welfare will not be able to successfully make a claim.
"Those who are unrepresented, may not even know the trade-offs they are being asked to make ... victims deserve real justice, not an ultimatum."
Historical claims are those brought by people placed in the care of or came to notice of MSD's predecessor before January 1, 1993.
Claimant's needing more information should call Helpline on 0800 631 127.
