A one-off compensation package for some Southern rail passengers in the south of England "doesn't go nearly far enough", campaigners have warned.
Season ticket holders will be able to claim a refund for the equivalent of a month's travel in recognition of the major disruption to services in recent months.
The announcement was made by the Department for Transport to coincide with the rail industry revealing that fares will rise by an average of 2.3% next year.
James MacColl, of the Campaign for Better Transport, said: "What the hundreds of thousands of people who rely on Southern want are trains that run when they're supposed to. We are no closer to that.
"Instead, with fares rising by more than inflation, passengers are being asked to pay even more for their beleaguered service.
"This compensation package doesn't go nearly far enough. It only helps those who have season tickets and it doesn't deliver the fares freeze passengers have been calling for.
"There should be automatic and fair compensation, a fares freeze for everyone affected, and renewed effort to end the disruptions. Anything less is not good enough."
The chaos has partly been caused by strikes over changes to the role of conductors and high levels of staff sickness.
Passengers with an annual ticket will be able to claim the payout against their 2016 ticket, which can be paid directly into their bank account.
Customers claiming against quarterly, monthly or weekly tickets must have bought travel for at least 12 weeks between April 24 and December 31 to be eligible.
The Government said Govia Thameslink Railway (GTR), the parent company of Southern, has the details of most season ticket holders and it will be inviting them to log on to a website to claim compensation.
The company will also be able to consider proof of purchase from people claiming a payout who have not previously registered.
Fares on Southern and Gatwick Express trains will rise by an average of 1.8% next year.
Pat Glass, Labour's shadow rail minister, welcomed the compensation announcement but claimed it does not address "the fiasco on Southern rail".
He added: "Southern is responsible for 620,000 passenger journeys per day, but only 84,000 passengers will be compensated under the announced measures, meaning that most people who endure Southern's miserable services will not be affected.
"Even those who can claim one month's worth of compensation will suffer on average a 1.8% fare increase from January 2. It's a case of giving with one hand and taking with the other."
Vickie Sheriff, of consumer group Which?, claimed it was fair that beleaguered Southern passengers were being offered improved compensation "after months of travel misery".
Rail minister Paul Maynard insisted that getting Southern rail services back on track was "a priority for the Government".
He went on: "I know that what passengers want most is a reliable service.
"But when things do go wrong it is right that we compensate people who have not had the service that they deserve. This is a gesture in recognition of the problems people have faced."
Charles Horton, chief executive of GTR, accepted that passengers have endured "many months of disruption and misery due to industrial action and poor performance".
He said: "For that I am truly sorry.
"While they have clearly been able to claim under our Delay Repay scheme, we welcome this additional compensation package."
Passengers on GTR's services will be the first in the country to be able to claim compensation under the separate Delay Repay 15 scheme.
From December 11 they will be eligible for a payout for train delays over 15 minutes, rather than the current 30 minutes.
Under Delay Repay 15, passengers will be entitled to compensation worth 25% of the cost of a single fare for delays of between 15 and 29 minutes.
More serious disruption can lead to passengers claiming up to 100% of the cost of a ticket.
Delay Repay 15 will be rolled out across the country when franchise agreements are renewed over the coming years, although the Department for Transport said it is trying to implement the measure sooner.