The Salvation Army moved and promoted an officer who confessed to abusing an eight-year-old girl, an inquiry has been told.

News of his promotion and the officer's continued contact with her family contributed to the child's mother having a nervous breakdown, the royal commission into child sexual abuse heard on Wednesday.

The mother, JH, said via videolink her daughter was always a "gentle soul" but became more quiet and withdrawn after she was abused by then Captain Colin Haggar in 1989.

JH ran the local op shop for the Salvation Army in a central-western NSW town. She said that in 1989 she and her husband had been visited by Haggar, who confessed to sexually abusing their daughter, who was eight or nine at the time.

We "just sat there in disbelief" when Haggar told us "it wasn't that serious, I only fingered her", she said.

JH and her husband spoke with two senior officers about Haggar's admission. "I felt they did not want to believe us," she said.

In 1990, she received a letter from Haggar saying he and his wife were "taking a break from the duties of officership so that we can spend time on our own spiritual path".

The commission has been told the Haggars were stood down and moved to Lidcombe where they were supported by the army.

JH said Haggar had stayed in contact and wrote about his attempts to re-enter the army. He once contacted her to say he would be driving through and wanted to see "how my daughter was doing", she said.

"I never wanted to see him or let him meet with our daughter," JH said. "I began having panic attacks".

In 1993, Haggar was readmitted to the Salvation Army and promoted to major and ultimately to the rank of lieutenant colonel. He was also on the Salvation Army's cabinet.

JH said she and her husband did not go to police at the time because they understood the Salvation Army would bring the matter to the attention of the police.

"We thought the matter would be taken care of by the Salvation Army officers, based on what they told us. We believed them," she said.

JH said her family had never been offered any support or counselling. They had left the corps in May 1991.

The army recently offered counselling and help "out of the blue", she said.

JH has also received a letter from the Salvation Army commissioner, James Condon, who expressed his sadness and offered the services of the army.

JH said: "If they let me down so badly all those years ago, why should I let them in now?"

The lack of transparency in the Salvation Army's processes for dealing with complaints about abuse needs to change, a victims' advocate says.

Karyn Walsh is the chief executive of Micah, a Queensland community-based organisation which has helped 95 abuse victims who were resident in Salvation Army homes go through a claims process.

She said victims had been critical of the process and changes were needed including "full transparency about how decisions are made".

The commission has heard that there were significant differences between the levels of compensation offered by the Salvation Army, with some people being offered $7,000 even if they had been significantly harmed.