The NSW government will review sentencing and bail guidelines after an inquiry recommended taking children's welfare into consideration when dealing with offenders.
A parliamentary inquiry into supporting children with imprisoned parents last year found having a parent behind bars had a profoundly negative effect on children - and should be avoided when possible.
Children with incarcerated parents are frequently swept under the rug when it comes to public policy and neglected by government services, the committee's Liberal chair Peter Sidgreaves said earlier this year.
Bail and sentencing legislation should be changed so judges and magistrates have to consider whether an offender is a parent or carer before putting them behind bars or refusing them bail, the inquiry found.
Parents should be given alternatives to incarceration wherever possible, especially when an offender would be given a sentence of 12 months or less.
The inquiry report said these measures could reduce children's suffering.
The government said it supported 21 of 40 recommendations, agreed to consider five, noted 13 and rejected one.
Four recommendations regarding sentencing and bail were noted, and the government committed to keep these settings under review.
However it noted existing laws allowed courts to consider a range of factors when sentencing an offender, including hardship to family and dependants in some circumstances.
Similar considerations are able to be made in the case of bail applications.
Many children with parents in jail are put into out-of-home care, the government added, and supported through the departments of communities and justice.
A spokeswoman for Attorney-General Mark Speakman told AAP the government continually worked to assess the effectiveness of bail and sentencing laws.
"The NSW Government has an ongoing commitment to actively review and monitor sentencing laws, including through the important work of the Sentencing Council, to ensure these laws remain fit for purpose," she said on Monday.
NSW Advocate for Children and Young People Zoe Robinson told the inquiry she would welcome any consideration that took into account dependants during sentencing.
Children of offenders were often traumatised by being removed from their parents and some cycled through up to 50 foster placements, Professional Individualised Care founder Jarrod Wheatley told AAP.
Even in some circumstances where a parent or carer may have problematic elements in their life, a non-broken parenting relationship can still be preferable to one where the government intervenes, he said.
"There are undoubtedly children where we need to intervene and care for that child," Mr Wheatley added.
"But it's also true to say that there are many children where they're better off at home just receiving a lot of support."