The European Center for Constitutional and Human Rights however charged that Germany's Foreign Ministry was "dodging its legal responsibility to compensate the victims" more fully, adding that "many Chilean victims were left out."
Victims, however, expressed views that the payment was insufficient and said it didn't solve their problems.
"We are very grateful for the help, for the tremendous effort of the parliamentarians who visited us," said Horst Schaffrick, who settled as a three-year-old with his family in the community.
"How am I going to continue into my old age, how am I going to live?" he added.
'Violence, slave labour'
A German government and parliamentary committee in its report said Friday that Schäfer "tore families apart, abused countless children and actively collaborated with Pinochet dictatorship henchmen on torture, murder and disappearances.
Germany's President Frank-Walter Steinmeier had acknowledged in 2016, when he was foreign minister, that "for many years ... German diplomats at best looked the other way – and clearly did not do enough for the protection of their compatriots in this colony."
The scale of the atrocities committed at the fenced-in mountain commune 350 kilometres (215 miles) south of Santiago came to light only after the end of Pinochet's regime.
Schäfer, having initially run from justice, was arrested in Argentina in 2005 and then jailed in Chile for child sexual and other abuses. He died behind bars in 2010 at the age of 88.
His right-hand man Hopp, who ran the compound's clinic, was convicted in Chile of complicity in Schäfer's sex crimes but fled to Germany in 2011 before the court ruling could be imposed.
A German court initially upheld the jail sentence but a higher court, and state prosecutors, have since found that the evidence provided by the Chilean court fell short of that required by German justice.