This study contributes to the literature on marine conservation, fisheries management, and coastal development. The study investigated the distribution mechanism of government -led compensation payment schemes for small-scale coastal fisherfolk in Ghana during the closed season. We also sought to explore the perception of fisherfolk concerning equity and fairness in the distribution of the compensation scheme. The empirical data consisted of 220 household surveys and 20 in-depth interviews with relevant stakeholders from the Central Region of Ghana. The findings from our study indicate that significant controversies exist about the selection of beneficiaries for compensation payment. There is a lack of transparency in the compensation schemes targeting criteria. The distribution process was widely perceived to be unfair. The results from the study show that there are high levels of politics and nepotism in compensation distribution. Access to compensation packages is largely influenced by political party affiliation. A more transparent and precisely targeted scheme may go a long way to improving perceptions of fairness and compliance. The paper calls for the introduction of alternative livelihoods for fishing households during the closed season.