Abdul Latif, from Bamford, has admitted claiming incapacity benefit and income support of almost £28,200 between March 2003 and September 2008, despite having £40,000 savings.
He was given a nine-month suspended prison sentence and a three-month curfew order preventing him from leaving his house between 9pm and 7am.
Sentencing, Judge Charles Mahon said: "You knowingly failed to tell the authorities that you had money set aside well in excess of the permitted amount. I have read your references and people speak well of you and you are well respected in your community."
Mr Latif arrived in the UK aged 17 and soon after set up a clothing firm with his brother. But the company fell into problems when Mr Latif became ill and he had to give it up. In 1997 he began claiming income support and incapacity benefit to care for himself, his wife and their three children. You are not entitled to the benefit if you have more than £16,000 in savings.
When interviewed in 2008, Mr Latif, who has no previous convictions, said he understood the rules and said he 'maybe forgot to declare it.' He has repaid some of the money he stole and has agreed to return the remaining £9,398 in the next few months, which is big of him.
Georgina Coade, defending, said: "He has sought to correct the mistake. He is an active member of his community and his local MP has said he has been very helpful with canvassing during election campaigns."
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