The Court of Appeal on Wednesday recommended that judges hand down higher sentences in incest cases, to better reflect the "objective gravity" of incest and the long-term harm done to victims.

But it declined to overturn a five-and-a-half year sentence given to a man convicted of incest against his two step-daughters, and impregnating one of them at just 13.

The Director of Public Prosecutions had appealed the sentence, describing it as "manifestly inadequate", particularly given the 13-year-old had been forced to terminate the pregnancy.

Fearing repercussions if she told anyone the truth, the girl instead said she had been having sex with a boy at school. She then had to endure her abusive step-father continuing to live with the family as a result of her lie.

The girl's sister, who has a mild intellectual disability, was 15 or 16 when her step-father committed incest against her, and also indecently assaulted her.

The man, who pleaded guilty to incest and indecent assault, was sentenced to three-and-a-half years' jail for the incest against the 13-year-old girl and two years for the attacks on the older sister.

During his County Court trial, the court was told he had been abusing alcohol and cannabis at the time of his offences.

In sentencing, the County Court judge took into account evidence that the man suffered from post-traumatic stress disorder after enduring "catastrophic losses" in the 2009 Black Saturday bushfires.

The court had also taken into account the belief that the man had a good prospect of rehabilitation, he had no prior convictions, he fell into the lower end of the autism spectrum and he had displayed "genuine remorse".

In its written judgement, the Court of Appeal said judges were imposing "disproportionately low" sentences, compared with the "yardstick" of a maximum penalty of 25 years' jail for incest.

"Sentencing for incest must reflect society's denunciation of the sexual abuse of children and the profound harm which it causes," it said.

"The very high maximum penalty underlines the seriousness with which the offence is regarded."

However, it said judges were bound to impose sentences that were consistent with those imposed by other judges.

"But for the constraints of current sentencing which – as we have said – reflect the requirements of consistency, we would have had no hesitation in concluding that the sentence imposed ... was manifestly inadequate."

The Court of Appeal said judges should be the ones to change sentencing practices.

"The criminal justice system can be – and should be – self-correcting,"  the court said.