The Prime Minister, Tony Abbott, will make further changes to his signature paid parental leave scheme in a fresh bid to legislate the policy early next year.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
In a major backdown, Mr Abbott is due to announce his plan in Sydney on Sunday morning.
A spokeswoman for the Prime Minister said he would further "refine" the existing $5.5 billion scheme, which has been widely criticised as too expensive, as the government responds to the Productivity Commission's review into childcare.
The final Productivity Commission report has not yet been publicly released. But in its draft report, handed down in July, it recommended that the government divert funds from the paid parental leave scheme to improve childcare funding.
This would enable to government to increase childcare funding to other types of care such as nannies.
Mr Abbott will not announce the exact details of his plans on Sunday. His spokeswoman said he would take the new policy to Cabinet early next year for approval.
This will give the Coalition time to legislate the new scheme in time for a July 2015 start date.
The current policy would give pay the mother their full salary plus superannuation for six months, capped at an annual income of $100,000.
This was already revised down from an annual income of $150,000 in response to criticism about the cost of the scheme.
It is understood Mr Abbott is considering options to better target the scheme towards low and middle income families. This may include blocking access to parents who earn more than $150,000 and reducing the maximum payout.
Last week, Mr Abbott pledged he would deliver "a fair dinkum paid parental leave scheme" but flagged "tweaks" following discussions with Senate crossbenchers early next year.
Senate crossbenchers contacted by Fairfax Media last week said they had had no recent discussions with the government on the parental leave scheme.
It is also understood Mr Abbott will keep his plan to fund the scheme via a 1.5 per cent levy on the nation's largest companies.
Despite describing his paid parental scheme as his "signature" policy and taking it to two elections, Mr Abbott has struggled to find parliamentary support for the plan.
This includes backbenchers from within his own party, who have threatened to cross the floor to block it.
