Prime Minister Tony Abbott is set to cave in and cut the threshold for his paid parental leave scheme to $100,000 from $150,000.
Mr Abbott is facing mounting opposition from within coalition ranks over the generosity of his signature policy.
Maximum pay outs for 26 weeks leave will be capped at $50,000 compared to $75,000, News Corp Australia reports.
The reduced threshold is likely to attract Greens support which potentially will ease the legislation’s passage through the Senate.
The federal government is yet to introduce a bill for the scheme to parliament.
Liberal senator Sue Boyce is among government backbenchers concerned about the original proposal’s maximum pay out.
“It’s too generous,” she told ABC Radio.
She supports the scheme and is pleased that it includes superannuation, which the current scheme Labor introduced does not.