Christmas will be virtually unrestricted for Hunter residents, but Premier Gladys Berejiklian has urged those most at risk from COVID-19 to be careful.
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Aged care homes are again open to visitors and travel between the Hunter and Sydney is unrestricted, except to and from the Northern Beaches area.
NSW reported eight new cases of community transmission in the 24 hours to 8pm on Tuesday, seven of them linked to the Avalon cluster, which stands at 97.
The encouraging numbers, down from 30 on Saturday, prompted the government to tweak restrictions in Sydney, Wollongong and the Central Coast, excluding children aged under 12 from the daily limit of 10 visitors in homes until Boxing Day.
Other limits on dancing and hospitality venues, including only one person per four square metres in cafes, bars and restaurants, remain in place for Sydney, Wollongong and the Central Coast.
The section of the Northern Beaches north of the Narrabeen bridge remains in hard lockdown, but those in the southern portion can have up to 10 visitors to their homes, including people from other areas.
The Hunter and the rest of NSW have far more generous limits for festive celebrations.
People can welcome up to 50 visitors at a time, though the government recommends this be limited to 30 if the property has no outdoor areas and urges caution for anyone in a high-risk group.
"I would say that anybody who is over the age of about 70 or anyone with other health issues, co-morbidity, should think very seriously about whether or not they have people into their homes, but, if they do, try to have it outside," Health Minister Brad Hazzard said.
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Aged care residents can again receive visitors and go out for family Christmas gatherings after being locked down until midnight Wednesday. More than half of the 55 deaths due to COVID-19 in NSW have occurred in aged care.
Hunter residents can also travel freely to other parts of the country, though some states require a permit and Western Australia has banned everyone from NSW.
The Hunter has not recorded a positive test during the latest outbreak, but the government urged Central Coast residents to get tested if they have even the mildest symptoms after traces of the virus were found at a sewage treatment plant in Kincumber.
The affected sewage system covers Gosford and surrounding suburbs and serves 140,000 residents.
Ms Berejiklian told a media conference on Wednesday that the government had excluded children from the home-visitor count in Sydney because "children under 12 have proven not to be carriers or transmitters of the disease".
A NSW Health spokesperson later clarified that children under 12 were "less likely" to transmit the virus.
The NSW government announced that all hospitality venues and hairdressers would have to start using Service NSW QR codes from January 1 as other QR platforms had proved "too frustrating" for contact tracers.
The Australian Medical Association says the government should "seriously consider" cancelling its New Year's Eve fireworks on Sydney harbour.
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