The family of a woman and baby boy killed in the Rozelle blast says the local council has "grossly mismanaged" money raised in an appeal.

Leichhardt Council oversaw the appeal, which raised more than $220,000 for the families of victims and residents whose homes were destroyed or damaged.

Bianka O'Brien, 31, her 11-month-old son Jude and Chris Noble, 27, died after an explosion in the convenience store beneath their homes on Darling Street in September.

Mrs O'Brien's father, who did not qualify for any money, said it was unfair that some family of victims missed out entirely, while residents who lost property could claim as much as those who lost loved ones.