A Senate committee has paved the way for the Turnbull government to withhold childcare rebates from the families of unvaccinated children, despite health experts' concerns it will not improve vaccination rates.

It also recommended introducing a national scheme to compensate families of children who have had an adverse reaction to vaccination.

A senate committee has backed the plan to withhold childcare payments from families of unvaccinated children. Credit:Wayne Taylor

Under a proposed 'no jab, no pay' law, children who are not vaccinated would not be eligible for a range of childcare subsidies from next January. This would remove current exemptions for conscientious and religious objectors.

The law was introduced into Parliament in September to try to encourage a growing number of conscientious objectors to vaccinate their children.