The new laws require beneficiaries to take reasonable steps for their children to attend early childhood education from the age of 3, or have their benefits cut.
The policy was brought in to ensure dependent children could "access and benefit from vital education and health services".
However in light of early childhood education quality concerns highlighted by the Herald, critics say it has the ability to do more harm than good - as poor care can be detrimental to child development. Those most at risk of low quality care are children in low socio-economic areas.
"There is no guarantee that beneficiaries are able to put their kids into high quality education - so sanctioning is not going to benefit these kids, who are the very kids who need the best early childhood education," said Green MP Catherine Delahunty.
"This policy is not what's good for kids, it's what's good for government targets."
The Ministry of Social Development said it only referred parents to providers that were licensed by the Ministry of Education. It said to date, no one had been sanctioned for failing to meet their social obligations.
Author of the study, Judi Randall, said three of the eight parents interviewed for the study raised quality issues - such as concerns that the services weren't culturally accepting or lacked supervision. In one case a mum said her boy was being hit by other children.
They felt pressured to enrol their children or face sanctions - so would pick a centre even though they were uncomfortable.
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Hine felt the centre was not a good fit, and that they didn't understand her culture. Her son would cry every day when she dropped him off. She said Work and Income couldn't provide a list of alternative services.
Ms Randall's study said the parents' experiences showed the obligation had put pressure on families, and had not addressed the provision of accessible high quality ECE.
"Poor quality practices are not only damaging to children's well-being, they also create barriers and issues of trust ... making it an obligation for parents to enrol their child in ECE without being able to assure high quality may be putting them into a damaging environment," the study said.
The Ministry of Social Development, which was sent the study, said it could not comment on an individual case without a privacy waiver.
"Work and Income works closely with people who have social obligations. Our aim is to help people meet them so their children can learn, develop and benefit from early childhood education and health services," it said.
"We take into account the location of the provider, transport requirements and the need of the parent and child.
"If a parent or caregiver want to change education and care providers, or they're having difficulty accessing ECE, we'll help them find one that works best for them and their child."
The Ministry of Education said it had provided advice and support to the Ministry of Social Development on how to implement the policy.
The Minister of Social Development, Anne Tolley, was not aware of any quality concerns.
