The latest developments in Wollongong's "body in the bin" case came shortly after 10.30am as Goddard, dressed in a lilac shirt, struggled to her feet to enter the guilty plea.

Just minutes later, Taylor, 46, was granted bail pending her trial next year as she continues to fight allegations she was an accessory to the teen's 2008 manslaughter.

• Louise's mother: 'It haunts me'

Taylor walked from a Sydney courthouse just before 1pm after more than 18 months on remand and will be subject to strict bail terms, including a condition she avoid the Illawarra unless attending legal appointments.

The court was told she was set to reside at an undisclosed Sydney address.

Goddard had faced a murder charge over the teen's death but the Crown presented a fresh indictment yesterday, downgrading the charge to manslaughter.

The grandmother has admitted to failing to care for the sick teen on October 12, 2008 after she suffered injuries at the hands of a "unknown assailant" and was unsteady, swollen and too weak to even go to the toilet.

Goddard did not seek medical care and instead arranged for Louise to be moved to a caravan in Taylor's yard, where the teen allegedly died.

Louise had been living with Taylor's family for several years, having irregular contact with her parents.

On the day of her death, Goddard and a male co-accused, who cannot be named, were allegedly at Taylor's house when Louise appeared to become unsteady on her feet, a statement before the court said.

One witness described the teen as looking "intoxicated" while another said she had a swollen jaw and was having difficulty standing.

Police were alerted and officers attended Taylor's house on two separate occasions but were told there was no problem. Police did not see Louise on either visit, the court was told.

Later in the evening, Goddard was lying on a bean-bag when Louise, unable to raise herself to go to the toilet, defecated next to her.

Instead of dashing for medical assistance, Goddard arranged for one of her grandchildren to clean Louise before organising for her to be moved to a nearby caravan.

It is alleged Taylor then spent months telling Louise's mother that her daughter had simply moved to Melbourne and wished to have no contact with her family.

It was not until late 2010 that police were advised Louise may have been killed.

Officers searched Goddard's home on February 28 last year and discovered Louise's remains inside the buried bin.

An autopsy of Louise's body found she had fractures to her shoulder blades and jaw, consistent with hammer blows.

Pathologist Isobella Brouwer noted Louise's condition prior to her death was consistent with a subdural hemorrhage, which could have been caused by a forceful blow to the head.

She said the injury could have been fatal if left untreated, the court heard.

The court was told that Goddard initially told police she had killed Louise but later clarified her statement, saying she simply felt responsible for the teen's death because the girl had died in her presence.

Defence solicitor Mark Austin, acting for Goddard, told the court yesterday his client had recently been diagnosed with dementia.

He said tests were likely to be conducted to determine if Goddard had been affected by the condition at the time of Louise's manslaughter.

Goddard is also set to give evidence at Taylor's trial.

Defence barrister Bernadette O'Reilly, acting for Taylor, made an application for bail on her client's behalf.

The Crown did not oppose bail but ordered Taylor to report to police daily, reside outside the Illawarra and not approach any prosecution witnesses.

Defence solicitor Aaron Kernaghan, also acting for Taylor, said his client was happy to have been conditionally released.

"She looks forward to defending herself at trial . . . it's a statement she wants to make clearly that she is not guilty and is looking forward to the opportunity to avail herself of the court system," he said.

Taylor and the male co-accused will front court on November 2.

It is likely their matters will ultimately be heard in the district court.

Goddard is set to reappear on December 7 for sentence.