Samuel James Lawless, 31, remains employed by the Human Services Department despite pleading guilty to possessing and transmitting child pornography between September 2006 and June 2013, the Courier Mail reports.
Lawless has been placed on leave without pay while public servants investigate whether his employment as a call centre worker at Medicare in Brisbane should be terminated.
The images found on his computer after a tip off from the FBI were graded at the highest level, which is used for content that is considered violent and depraved.
He is due to be released from Wolston Correctional Centre in weeks.
Human Services Minister Marise Payne said all government employees were expected to abide by the Australian Public Service code of conduct.
A department spokeswoman said paid leave is not typically granted where the department is aware the employee is serving a custodial sentence.
"Generally, the department considers a range of factors in determining whether to grant leave to staff, including the staff member's circumstances and whether granting leave is in accordance with the department’s Enterprise Agreement and policies," she said.
The Community and Public Sector Union declined to comment on the case.