Survivors of institutional child sex abuse are being warned the payments they are hoping to receive under the national redress scheme may be far less than anticipated.

The royal commission has recommended that any previous compensation received by survivors be indexed for inflation and deducted from the redress payment.

Lawyers and victims' advocates say that is not widely understood and will devastate many applicants.

Under the proposed redress scheme, people who have already received compensation from an offending institution can apply for a so-called "top-up" payment.

But the first payment, possibly including Medicare and lawyers' fees, will be indexed for inflation and deducted from their redress.

'Like robbing the poorest'

Melbourne lawyer Angela Sdrinis, who has handled compensation claims for hundreds of institutional child sex abuse survivors, said the indexing of payments may see people getting far less than they expected.

The average payment under the redress scheme will be $65,000-$75,000, and the original average payment adjusted for inflation would be about $60,000 or $70,000, Ms Sdrinis explained.

"So a survivor may not actually be entitled to any further payment under the current proposed redress arrangements," she said.

Survivor advocacy group CLAN is angry about this little-known element of the proposed redress scheme.

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The group's chief executive officer Leonie Sheedy was shocked by the royal commission's recommendation and said it was immoral.

"This is like robbing the poorest victims in Australia, and I urge the Prime Minister, as the patron of CLAN, to cease this injustice," Ms Sheedy said.

"I think they had actuaries who are middle-class people who made a decision for the battlers of Australia.

"They're going to index them on the gross amount, not the net amount ... they didn't get that money — the lawyers got the money," she told the ABC's The World Today program.

More trauma

The recommendation about payments may be a shock to many survivors. ( AAP: Jeremy Piper )

Ms Sdrinis said she is worried about the impact this will have on her clients and other survivors.

"I'm very significantly concerned that the redress arrangements will actually end up being another slap in the face for survivors," she said.

She said many have an expectation that they will receive the maximum payment of $150,000, but under the proposed scheme very few would, and many would get nothing further at all.

"And I just think that that will exacerbate their trauma," Ms Sdrinis said.

So far only Victoria, New South Wales and the ACT have agreed to join the national redress scheme.

It is due to start on July 1.