Carol Mochan, Labour's public health spokeswoman, described the UK Government's proposed £5billion worth of welfare cuts as “austerity”.
She warned her party not to balance the books “on the back” of those most in need of help.
But Sarwar, the party's leader north of the Border, said he supports the benefits overhaul, which he has denied amounted to “cuts” at all.
He said the welfare budget would still go up despite the changes to disability support, something he claimed was “the very opposite of austerity”.
Asked by reporters in Glasgow whether Mochan could face disciplinary action over the disagreement, Sarwar said: “Carol Mochan is a fantastic member of the Scottish Parliament, a fantastic advocate for the local community, and will be a fantastic minister in the Scottish Labour government.”
Mochan joins a growing number of Labour politicians speaking out against the cuts, with Alloa and Grangemouth MP Brian Leishman also using the term “austerity” to describe them.
Former MSP Neil Findlay quit Labour, accusing it of having “lied” to the electorate.
Despite the backlash, Sarwar claimed his party was still united. He added: “That unity is what won us the election last y...