The woman served 12 months actual time in custody for the offence, which involved stealing more than $63,000 from a child care centre she was working at between 2008 and 2010.
Judge Sarah Bradley agreed, saying she had made steps to rehabilitate since her release. She also lost her blue card to work in childcare and no longer had contact with her children.
But Judge Bradley said it didn't diminish the seriousness of the offence. "You quite freely, over a period of time, grossly betrayed your daughter by exploiting her in this way," she told the woman.
"It's clear that this offending must have had a very significant impact upon your daughter."
The woman was sentenced to two years' probation for making the material and two years' imprisonment, to be wholly suspended for three years, for distributing it.
The woman did not say anything to waiting media as she walked from the court.
- AAP