Many separated people will have to order a new Medicare card to apply for the NSW government's $250 in parents' vouchers.
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The five $50 vouchers are to reward parents for helping with home schooling during 2021 and are valid at recreation, entertainment and accommodation businesses until October 9.
The government has made the vouchers available to two households if children live at both addresses, but separated parents who still share a common Medicare card cannot both access them.
But Service NSW's online system rejects the Medicare cards of separated parents whose ex-partners already have used the same card to apply for the vouchers.
"This fraud prevention control is in place to ensure people are not applying multiple times to receive the Parents NSW vouchers," a Service NSW spokesperson said.
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Service NSW said the solution was to apply for a new Medicare card and copy the children onto it so they are on both parents' cards.
The voucher scheme has distributed about $78 million to 315,000 people since February 7.