Tracey Lee Pratt, 43, stood charged in NSW Supreme Court in Wollongong over the deaths of neighbours Kenneth and Margaret Keyte, 86 and 71, in their home on or about August 9 last year.

At the time she lived nearby in a flat with her husband and son and, according to a number of witness statements, displayed bizarre behaviour patterns in the lead-up to the deaths.

Justice Robert Hulme said the attack on "two lovely people who had only goodness in their hearts" was sustained, frenzied and brutal.

He said he accepted Ms Pratt knew what she was doing was legally wrong but her mind was so diseased by paranoid schizophrenia that she did not appreciate the "moral wrongness of her actions".

She will remain as a forensic patient in an appropriate jail or secure hospital with regular reviews by the Mental Health Tribunal to assess her suitability to be released gradually into the community.

The court heard yesterday Ms Pratt was suffering florid delusions that Mr Keyte was stalking her and wanted to steal her son, and that Mrs Keyte was in collusion.

It was part of a raft of delusions she was experiencing at the time including the belief the moon was about to hit the earth and that she had the "raw energy" to cure Aids.

The court heard earlier she had gone to the couple's home and bashed them with an electronic massage appliance, a chair and her own fists, leaving them to die on their lounge room floor.

Justice Hulme heavily relied on evidence by two forensic psychiatrists.

Dr Olav Nielssen said Ms Pratt had been suffering mental illness for many years and was admitted to Goulburn Hospital in 2006 for paranoid delusions and psychosis.

She was treated with anti-psychotic medication and placed on a Community Treatment Order for six months.

Dr Nielssen said when that order lapsed, she discontinued her medication and was "lost to the system".