Labor will support changes to the childcare rebate, but only if they are split from childcare benefit legislation now before parliament.
The Abbott government wants to freeze childcare benefit income thresholds and continue to pause the childcare rebate limit at $7500 a child a year.
Both measures apply for three years and between them will save $336 million.
The Labor caucus on Tuesday agreed not to oppose the childcare rebate pause, but only if it's split from the childcare benefit changes.
Labor frontbencher Kate Ellis said the changes to the benefit would leave more than 500,000 families worse off.
"The government is attempting to rush these changes through parliament before it's even done its homework," she said.
There was no idea about who would be impacted, where they live, what they earn and the impact the measure would have on workforce participation.
The government was undermining a Productivity Commission review into child care by attempting to make cuts before its report was received, Ms Ellis said.
Labor will move an amendment to remove all references to childcare benefit from the bill.
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