Alleged killer Bhanu Kirkman is set to argue his innocence over the bashing murder of Bellambi mother-of-one Kristie Powell on the grounds of mental illness, a court has heard.

Lawyers for Mr Kirkman made the submission in Wollongong Local Court on Wednesday during a mental health hearing on charges of fraud committed before Ms Powell's death in October 2018.

A court has heard Bhanu Kirkman will argue his innocence in the bashing death of Kristie Powell on mental illness grounds.

"He's on remand in relation to a charge of murder and he has a clear defence in relation to mental illness in relation to that matter," defence lawyer Michael Betts said, as his client appeared in court via video link from the hospital at Long Bay jail and was committed to stand trial.

"We anticipate he will be made a forensic patient."