Couple families whose youngest child has turned 13 will lose family tax benefit Part B from July 1.
Single parents aged over 60, grandparents and great-grandparents caring for a youngest child aged 13-18 will be shielded from the cuts following a deal with the Senate crossbench, Social Services Minister Christian Porter said.
The measure, which passed parliament with the support of Labor on Monday, will save $525 million over the forward estimates.
The federal government split the measure off from broader legislation making a raft of changes to family tax benefit payments last week, after taking up an offer from Labor.
The measures Labor won't support - cuts to yearly supplements and a compensation bonus of $1000 for those no longer receiving Part B of the benefit - will be reintroduced to parliament this week.
Greens senator Rachel Siewert said her party opposed the legislation because it ignored kinship carers and foster carers.
She said evidence showed children cost more once they turned 13.
A government-dominated Senate inquiry recommended the entire package of changes be passed.
In its report tabled in parliament on Monday, along with separate dissenting reports from Labor and the Greens, the committee said it acknowledged concerns about the impact on vulnerable families.
But given Part B is a payment to assist single income families, the measure was aimed at encouraging people to increase workforce participation as their children become more independent and require less care, the report said.
"The committee considers that these changes will provide an incentive for parents to re-engage in the workforce, recognising that as children grow older, parents have increased capacity to participate in the workforce," it said.
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