The prospect of children having to enrol in school at set times, rather than when they turn five, has early childhood centres worried.
Ministry of Education figures show the early childhood sector would be $11 million out of pocket if every school took up the cohort entry option.
Under the changes the government wants, new entrants would start from the beginning of each term closest to their fifth birthday, rather than on their birthday.
Schools would be able to choose whether to adopt cohort entry, which officials said would help children making the move and help schools manage the process.
Early Childhood Council chief executive Peter Reynolds opposes the policy, and said he feared it would send some smaller daycare centres to the wall.
He said most childcare centres could cope with one or two children leaving to start school, but not big groups all at once.
"If we move to cohort entry it means that groups of children could, for example, all start school at the beginning of the following term. Which means the centre might see 10-15 children all disappear overnight.
"That's rather more difficult to try and compensate for, particularly when childcare centres are subsidised by government on the basis of the children who actually attend the service," Mr Reynolds said.
At present, though children don't have to be enrolled in school until they turn six, 90 percent start within one or two weeks of their fifth birthday.
New Zealand Kindergartens chief executive Clare Wells said there was no evidence cohort entry was better for children.
"At the moment it feels as though decisions would be based on what's administratively better for the schools, and organisationally better, and also what the fiscal impact is for government. And both those things are probably valid reasons.
"But actually the critical issue here should be about whether it's good for children or not. And we just simply do not have the evidence to say whether it is or not."
New Zealand Council for Educational Research chief researcher Cathy Wylie agreed there was no research showing that either individual or group entry was better.
"In New Zealand we've had individual entry for so long and I believe that there are some schools that might have trialled it [cohort entry] but I don't know what the response of that is.
"It's certainly something that you'd want to keep a close eye on and have some guidelines on and you'd like to have some research going on around it in the first few years."
Schools which wanted to change would be required to consult parents, prospective parents and early childhood centres before adopting the policy.
NZEI president Lynda Stuart said the policy appeared voluntary but once a school had changed it would be hard to change back.
"Consulting with the community at one stage then can set what happens for the future. What one group of parents, or cohort of parents for that matter says, may not be what the next cohort of parents actually would like," she said.
Fewer than than 5 percent of new entrants started school in groups, but even the schools with cohort entry must accept a child at five years of age.
Mr Reynolds said he was surprised the ministry hadn't surveyed those schools to find out what worked and what didn't.
"I haven't seen anything from those schools to say 'well look here's our experience, we think cohort entry is a great thing and should be applied'."
"Is it going to work in every community or is it inappropriate for some, I haven't seen any of that sort of discussion at all," he said.
The Ministry of Education estimated the change would cost the early childhood sector up to $11 million if all schools adopted the policy, and $1 million if only 10 percent of schools took it up.
Mr Reynolds said the change would cut funding to a sector that has already lost millions in per-child funding since 2011.
"The minister will tell us that she consistently puts new money into the sector, and she does, but that pays for population growth.
"The average childcare centre has lost as much as $90,000 off its bottom line, each year, because the per child rate that's paid by government as that subsidy has gone down," he said.
Submissions on the Education Amendment Bill close at the end of the month.