Judge Morris gave Dougherty a "final warning" and advised him to take the assistance offered or face going to jail.
Dougherty addressed the judge and remarked he had sought previous help and had made some changes.
He told the judge he was the sole caregiver to 10 grandchildren and he would seek counselling.
Defence lawyer Mark Alderdice said Dougherty had spent $80 on pokies on the day he took the wallet, and described it as opportunistic offending.
Outside court, Dougherty said he had found the wallet at a local pub and made an "idiotic" decision to pocket the money.
"It was a stupid move and I know that now," he said.
"Apart from this, I had stopped offending.
"I am struggling with mental health issues which I am taking medication for - this is what happens when you get put in jail for the wrong thing," he said tearily.
He said that he lived "in a cave, like a recluse", and felt there was no support for him and he couldn't find employment because everyone knew who he was.
Dougherty's long-term partner, Joann Atutolu, moved to Adelaide earlier this year.
Dougherty was awarded more than $800,000 in compensation for his wrongful conviction, for which Nicholas Reekie was convicted in 2003.
Dougherty bought a property in Ashhurst, near Palmerston North, with his payout but has since sold the house and is living off a sickness benefit.
In July 2011, Dougherty was sentenced to 300 hours of community work and nine months' supervision for a burglary. He told media at the time he was ashamed and embarrassed about the robbery, but it had forced him to address his drug and alcohol problems.
