Labor will oppose the Turnbull government's move to randomly test Newstart and Youth Allowance recipients for drugs.
The government plans to roll out the scheme across three trial sites from January next year, affecting about 5000 people.
The Labor caucus on Monday voted to oppose the drug test trials and six other sections of the legislation and will reserve its position on the overall bill until after a Senate inquiry.
The Australian Medical Association has described the drug tests - along with the removal of exemptions for welfare obligations based on drug and alcohol dependence and changes to reasonable excuses - as mean and stigmatising.
"The AMA considers substance dependence to be a serious health problem, one that is associated with high rates of disability and mortality," it said in a written submission to the inquiry.
"The AMA firmly believes that those affected should be treated in the same way as other patients with serious health conditions, including access to treatment and supports to recovery."
Professor Alison Ritter, from the National Drug and Alcohol Research Centre, labelled the measures ill-placed, ineffective and damaging.
Federal departments involved in the measures said proposed trials for drug testing were designed to test their effectiveness in detecting people with drug issues as well as intervention strategies deployed.
The departments said exemptions for mutual obligations based on drug or alcohol misuse were not in line with community expectations, and changing reasonable excuses would encourage recipients to address their dependencies.
The Senate committee will hold public hearings in late August and is due to report by September 4.