He said Matiaha's de-facto partner had not contributed anything to household expenses "so she remained on the benefit" but had gone out to work when the relationship ended.
Mr Stevens asked Judge Hobbs to consider community work as a punishment, as home detention would mean she could not attend her job which involved shift work.
Judge Hobbs told Matiaha if her de-facto partner had not contributed she would have been better off "getting rid of him rather than defrauding taxpayers".
He said Matiaha was "apparently remorseful" for what she had done, now had a job and had entered a guilty plea to the fraud charges as soon as she was able.
"Therefore, I don't think for this first offence that imprisonment is appropriate."
Judge Hobbs said aggravating features were the length of time Matiaha had continued to illegally receive the benefit, being two-and-a-half years, and her actions cast a stigma over beneficiaries who were entitled to their payments.
The Government is undertaking a crackdown on benefit fraud, with data matching conducted between Inland Revenue, Internal Affairs, Housing New Zealand, Corrections, ACC and Customs.
Benefit fraud discovered last year cost taxpayers a record $23.4 million and there were 742 prosecutions, official figures show.