The Turnbull government has confirmed it is backing away from unpopular changes to paid parental leave that saw new parents who claimed work and government entitlements accused of being "double dippers".
In the May budget, Tony Abbott's government announced it would prevent mothers from using the Commonwealth PPL scheme when they could access an employer scheme, a move that would have left 80,000 new mothers ineligible for government payments.
But Social Services Minister Christian Porter said on Wednesday the government was "reconfiguring that policy" after the backlash and was in talks with the crossbench.
Tuesday's mid-year budget statement showed savings to be made from changes to paid parental leave would be less than originally forecast in the May budget.
The government is now considering a compromise that would allow all new mothers to receive 18 weeks of paid parental leave.
If they have an employer scheme that covered them at their full wage for less than 18 weeks, they would be able to claim government payments at the minimum wage for the remainder of that period.
Labor spokeswoman for families and payments Jenny Macklin remains critical of the Coalition government's policy, saying thousands of new mothers would still face cuts to their leave payments, forcing some parents to spend less time with their newborns babies.
"The additional spending of $35 million in yesterday's MYEFO does not come close to making up the $1 billion in cuts to paid parental leave, which are still in the budget," she said in a statement.
Mr Porter said on Wednesday the government also planned to make changes to the work test to allow more casual workers and women in hazardous jobs, such as miners or jockeys, to claim payments.
"We should not maintain the system we inherited where women in certain professions miss out on paid parental leave because they do a dangerous job. That fails the common sense test," he said.
"Our changes will ensure that more mums can spend those important and rewarding early months with their children while keeping in contact with their professional lives."
The work test currently requires women to have worked 330 hours in 10 of the 13-months before the birth or adoption of their child, with a maximum break of eight weeks between work days during those 13 months.
For births from July 1, 2016, eligible parents will be able to have a 12-week break between work days in the 13 months before the birth or adoption of their child, and still meet the work test, a move the government says will be fairer for workers such as casual teachers.
Women in dangerous jobs whose employers can't provide a safe job while they are pregnant will, in their work test, be able to use work hours from before they had to stop working because of the risk to their pregnancy.