The New South Wales Supreme Court has ordered a review of compensation for a woman raped 500 times in foster care.

Justice Stephen Rothman has ruled the Victims Compensation Tribunal made an "error of law" in its determination for the woman who was raped from the age of five to 16.

In 2008 the tribunal ruled she was eligible for compensation on the basis of one act of violence, even though she made seven compensation claims.

The judge noted that although 500 rapes were perpetrated, the woman did not claim 500 awards of compensation.

He said the man who raped the woman was the son-in-law of her foster parents.

The judge quashed the decision and ordered the case be sent back to the tribunal.