Sixteen children have been admitted to intensive care since May with "life-threatening complications" from influenza at three hospitals, including John Hunter.
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NSW Health Chief Health Officer Dr Kerry Chant said these complications include "serious heart, brain, and muscle-related complications".
Dr Chant said children also represented more than a third of hospital admissions for the flu in that period.
She said this showed children were being "disproportionately affected by influenza this year".
The affected children were treated at the ICUs at Sydney Children's Hospital at Randwick, The Children's Hospital at Westmead, as well as John Hunter.
Dr Chant said numbers were "continuing to rise".
She urged parents of children aged five to 16 to book them a flu vaccine with their GP or pharmacist during the school holidays.
"In recent weeks we have seen influenza cases rising fastest among very young children as well as those aged five to 16, with these two age groups often accounting for around half of all flu cases diagnosed in NSW each week," Dr Chant said.
"Sadly, our children's hospitals are seeing an increasing number of these children being admitted for care and some of these patients are seriously unwell.
"The very best thing parents can do to keep their kids well this winter, and to reduce the risk of them being hospitalised due to influenza, is to ensure their children receive a flu vaccine if they haven't yet."
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