A Chorley pensioner claimed more than £18,000 in benefits even though she had more than £30,000 in savings.
74-year-old Catherine Smith, of Greenside, Euxton, admitted making false statements in order to gain housing and council tax benefits when she appeared at Chorley Magistrates’ Court on Wednesday.
The court heard how Smith had claimed the benefits since January 2007 on the grounds that she had savings of no more than £3,500.
But a data matching exercise revealed she had undeclared capital. After an investigation, it was found she had Premium Bonds of £30,000.
Magistrates heard her claim had been reviewed on three occasions since her initial claim in 2007, and each time she failed to declare her savings.
They sentenced her to a two-year conditional discharge and ordered her to pay £200 in costs.
Smith has also made arrangements to repay the overpayment in full.
Coun Peter Wilson, who oversees benefits at Chorley Council, said they had chosen to prosecute Smith because of the amount of money that was overpaid.
He said: “This case came to light as a result of a data matching exercise which suggested undeclared capital.
“Our investigation then revealed she had the maximum anyone can hold in Premium Bonds which is £30,000.
“Mrs Smith had three separate occasions, including two home visits, when she could have told us about the savings, but she didn’t.
“It was because of this, and the substantial overpayment, that we took the step of prosecuting her despite her being in her 70s.
“People must tell us if they have any change in circumstances, if they don’t we will take them to court.
“Mrs Smith now has a criminal record and has to repay the overpayment in full.”