If it were to include under-16s in its statutory definition, children would be better protected, claimed NSPCC head of policy Almudena Lara.
"By failing to officially recognise children as victims in law, the government is missing a crucial chance to give young people an extra layer of protection," said Lara.
The draft law includes the introduction of Domestic Abuse Protection Notices and Domestic Abuse Protection Orders to further protect victims and place restrictions on the actions of offenders.
It would also prohibit the cross-examination of victims by their abusers in the family courts, and provide automatic eligibility for special measures to support more victims to give evidence in the criminal courts.
But according to the bill, the decision has been made to leave out those aged under 16, to underline the legal distinction from child abuse, which is dealt with in separate legislation.
Child abuse can include the emotional impact of being exposed to harm as a result of witnessing abuse of one parent by another.
"Abuse perpetrated by an adult towards someone under 16 is classified as child abuse and the distinction needs to be maintained," states the bill.
It continues: "Children exposed to domestic abuse are victims of child abuse.
"The Serious Crime Act 2015 made it explicit that cruelty to children which causes psychological suffering can be a crime.
"This includes when children are emotionally harmed by exposure to domestic abuse, holding perpetrators to account for the impact of their abuse on children.
"Under existing law, the definition of ‘harm' to children recognises the impact of seeing or hearing the abuse of someone else, so local authorities may take action to protect children who witness domestic abuse."
Minister for crime, safeguarding and vulnerability, Victoria Atkins said the measures put "the needs of victims and their families at the forefront" and recognised the "horror" of such crimes.
Alongside the bill, the government is also pledging £8m of Home Office funding to support children affected by domestic abuse, and improved support for victims in the family court.
Lara added that with up to a quarter of a million children in England living with domestic abuse last year, funding announced to help children affected by domestic abuse "will just not go far enough".
She continued: "We want all children living with domestic abuse to know that they are not alone, and to have access to the right support to help them recover."
In October last year, a report by the home affairs select committee advised the government to develop a specific strategy for children affected by domestic abuse, give them "protected" status on waiting lists for mental health services, and impose new legal duties on local authorities to protect them.