Cllr Lesley Hayward, who sits on Woodley Town and Wokingham Borough councils, pleaded guilty to three counts of defrauding the borough and the Department for Work and Pensions at Reading Magistrates Court.
Cllr Hayward, of Kingfisher Drive, Woodley, is a former Liberal Democrat councillor who left the party and kept her Bulmershe and Whitegates seat as an Independent.
A statement from Wokingham Borough Council read: “Wokingham Borough Council is determined to ensure that the benefits we administer are paid properly, that debt is collected and recovered, and that those who break the rules are held to account.
"It is regrettable that a councillor, of whom the highest standards of conduct is expected, has behaved in this way.”
Cllr Hayward will return to court for sentencing on Tuesday, August 12.
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