David Smith, 51, received £21,700 in income support, council tax and housing benefit between March 2005 and April last year.
But he failed to declare a bank account into which he paid lottery winnings of £164,633 in March 2005.
Smith, of Hitchen Drive, Dukinfield, Greater Manchester, was sentenced to two months in prison on Wednesday, after admitting two counts of failing to declare the change in his circumstances.
Smith also pleaded guilty at Tameside Magistrates’ Court to five charges of failing to declare the information on his application form for benefits.
A computer check by the council revealed the hidden bank account.
The court heard he used the cash to buy a holiday and a car for himself and his father, who died in 2007.
Joe Kitchen, Tameside Council’s first deputy councillor, said: “People who make fraudulent benefit claims are not just cheating the system – they are cheating the whole community.
“Tameside Council is committed to the prevention, deterrence and detection of benefit fraud.”