A NSW Riverina hamlet has been evacuated and residents of another area have been given the all-clear to return home after six days.
The 1000-strong town of Darlington Point was cleared as the swollen Murrumbidgee River threatened the local levee.
The State Emergency Service (SES) said an evacuation order was activated on Saturday, ahead of the river's expected peak of 7.8 metres on Sunday night.
"The reason they were evacuated was because an engineer did an assessment of the levee and the engineer wasn't prepared to sign off on that levee," SES spokesman Phil Campbell told AAP.
Reports of a leaking levee were dismissed as false.
The bigger downstream town of Narrandera has been issued with a flood evacuation warning.
In the state's central west, 1000 residents of Forbes were given permission to return home early on Sunday afternoon, six days after they were evacuated from the path of the swollen Lachlan River.
"The majority will return to dry homes and dry businesses," Mr Campbell said.
At North Wagga Wagga, in the NSW Riverina, 600 people from 200 properties were allowed to visit their homes on Sunday morning for a clean-up.
But they have to leave by 7pm and return to temporary accommodation because the area is not yet safe to stay overnight.
"It will be a staged return," said Mr Campbell.
At Condobolin, in the state's central west, the caravan park is under water and has been evacuated, along with the small Aboriginal settlement of Willow Bend.
Although NSW faces a damage bill of at least $500 million, Premier Barry O'Farrell has insisted his government is not lobbying for a federal flood levy.
"The government's not pushing any particular line," he told reporters in western Sydney on Sunday.
He downplayed a suggestion from state Roads Minister Duncan Gay for Canberra to consider a special flood levy for NSW, similar to Queensland's last year.
"Duncan had a suggestion but there is no proposal from the NSW government for a flood levy," Mr O'Farrell said.
Prime Minister Julia Gillard has ruled out a NSW flood levy.