The resident received the Abu Dhabi Award personally from President Sheikh Mohamed for her heroic action on April 19
Deputies also approved a salary increase for citizens to soften the impact of record inflation that hit 10 percent in February and March, propelled by rising housing and food costs.
The government submitted the debt relief plan after deputies said a 300 million dinar fund set up in December was not sufficient, a move that could undermine efforts by the cabinet to abandon the Gulf Arab state's lavish welfare state.
The fund is to help Kuwaitis indebted from shopping sprees if their monthly repayments exceed half of their paychecks.
Both measures need final approval from the OPEC oil producer's emir.
MPs had demanded in December that the government buy banks' consumer loans portfolios estimated at about 4 billion dinars to secure write offs.
Deputies approved a monthly salary increase of 50 dinars ($188) for Kuwaiti public employees with an income of less than 1,000 dinars. Citizens working in the private sector will get a similar allowance from the government.
The increase comes months after the previous cabinet raised salaries for Kuwaiti state employees by 120 dinars.
Demands for another raise prompted the cabinet to quit and the ruler, Sheikh Sabah al-Ahmad al-Sabah, to dissolve parliament in March and call for fresh elections in May.
Central Bank Governor Sheikh Salem Abdul-Aziz al-Sabah told Reuters last week the government should contain spending to help tackle inflation in the world's seventh-largest oil exporter.
Windfall revenues from soaring oil prices have left Kuwait with a budget surplus of around $43 billion.
While the government has been trying to diversify the economy to prepare for when oil runs out, parliament has been pushing it to spend the surplus and has resisted efforts to scale back the welfare state.
Parliament also called on Tuesday for state auditors to probe the finances of the office of Prime Minister Sheikh Nasser al-Mohammad al-Sabah after a deputy questioned the legality of payments worth some 23 million dinars.
Parliament has a history of challenging the government, unsual in a region of autocratic rulers.
The government wrote off all consumer loans after the 1991 Gulf War that ended Iraq's occupation of the small Gulf state.
The resident received the Abu Dhabi Award personally from President Sheikh Mohamed for her heroic action on April 19
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