Shellharbour senior citizens will get an extra $250 to help with transport expenses, while those in Wollongong will miss out.
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This is despite transport costs in both areas being almost identical.
From January next year the state government will roll out the Regional Seniors Travel Card, which will come loaded with $250.
The card was promised during the recent election campaign.
It comes on the back of a recommendation by a parliamentary committee inquiry into public transport access for seniors in rural and regional areas.
Gareth Ward said only those living outside the Wollongong and Newcastle council boundaries were eligible.
"Seniors will be able to use the $250 to purchase fuel and pay for taxi fares from participating providers in rural and regional NSW, and pre-booked NSW TrainLink train and coach services," Kiama MP and Families, Communities and Disability Services Minister Gareth Ward.
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Mr Ward said only those living outside the Wollongong and Newcastle council boundaries were eligible.
This arbitrary distinction came about in 2018 in the wake of the 2018 Snowy Hydro sale.
The government pledged to spend the money on infrastructure in regional areas and it was decided Shellharbour qualified as regional while Wollongong did not.
However, when it comes to the costs of transport for senior citizens, there is not a substantial difference between the two local council areas.
Petrol prices are very similar, and the Seniors Opal card comes with the same $2.50 cap on travel costs in both areas.
That means, for instance, a trip to Sydney costs just $2.50 whether it starts from Wollongong station or Shellharbour Junction.
The same travel cap applies to bus travel in both council areas.
Taxi fares are also the same in both areas, though there are no discounts for senior citizens.
Mr Ward said further details about the seniors travel card will be released later this year ahead of the official rollout.
Transport for NSW was contacted for comment on this story.