The early childhood sector is concerned about beneficiaries being forced to send their children to pre-school, kindergarten or playcentres.
The Social Security (Benefit Categories and Work Focus) Amendment Bill would introduce sanctions for parents on benefits if they keep three and four-year-olds at home.
Consultation on the proposed changes ends on Thursday.
New Zealand Kindergartens Incorporated and the Early Childhood Council say children from disadvantaged backgrounds reap huge benefits from early childhood education, but there is disquiet about it being compulsory.
The ECC says the change could lead to early childhood education centres being created in areas that do not have any.
Social Development Minister Paula Bennett says sanctions would be a last resort.
Mrs Bennett said most beneficiary parents are doing a great job, but she is worried about the children in benefit-dependent homes who aren't getting vital services and are falling behind in education.
She said she has visited too many five-year-olds in classrooms who have not been in early childhood education and are really struggling.