Nathan Ballesty was arrested in December after he allegedly posted an online threat calling for Anthony Albanese to be kidnapped.
The post followed a series of offensive communications sent by the 27-year-old, primarily through the messaging platform Discord, according to police at the time.
Days before his arrest, he allegedly performed a Nazi salute in public in his home suburb of Beacon Hill on Sydney's northern beaches.
While 11 charges remain, a charge of threatening serious harm against the prime minister has been withdrawn, federal prosecutors have told AAP.
The alleged conduct is covered by a less serious charge of using a carriage service to menace or offend.
The newer charge alleges he engaged in a call on Discord with unknown others on December 15 which would be regarded as offensive or menacing.
If convicted of that charge, Ballesty faces a maximum of three years in prison, down from the seven-year term attached to the serious harm threat offence.
Ballesty is facing 11 charges, including eight counts of using a carriage service to menace or offend and one count of making a Nazi salute in a public place.
The 27-year-old has not entered pleas to the charges against him.
He will remain behind bars on remand until he returns to court in May.
Ballesty's home was raided on December 21 after a national security investigation spearheaded by federal police.
Several electronic devices were seized for examination.
Federal police have made threats to MPs a particular focus in the past year.
22°C