Illegal subletting and not using a house as a main home were among the ways residents were found to be flouting tenancy rules.
The overpayments totalled £856,828, the council's counter fraud unit discovered.
Action was taken against 83 people caught fiddling claims forms - this ranged from formal warnings and fines to prosecution at court.
During the 12 months, 51 people were prosecuted, 13 were fined and 18 formal warnings were issued.
In addition, 21 were caught flouting the rules of the council tax reduction scheme leading to overpayments totalling £17,380.
Earlier this month convicted benefits cheat Rashpal Kaur , who made bogus claims totalling tens of thousands of pounds, was jailed for failing to pay back the money. The 47-year-old, of Europa Avenue, West Bromwich raked in excess housing and council tax benefit over six years after lying about her circumstances to Sandwell Council.
During the past 12 months more than 100 homes have been seized by Sandwell Council after tenants were caught misusing properties.
The council launched more than 200 tenancy fraud investigations during the past year and recovered a total of 115 properties.
The council said two people had been convicted of ‘right to buy’ fraud during the past year.
Figures released earlier this year showed the council is owed more than £2 million in unpaid council tax from last year. A total of 19,628 council tax accounts were not paid in full by the end of the 2014/15 financial year, the figures show.
This has left the council needing to chase £2.2m. But bosses say despite the outstanding payments, they have a high council tax collection rate in the borough.
In September, it emerged that more than 10,000 housing tenants in Sandwell owed money to the council for outstanding rent payments equalling more than £3m.
At the source site, one commenter adds:
- As a council benefits officer, if a claimant is able to prove their entitlement to benefit they are required by law to pay it. The fraud is almost always the total fault of the claimant and to start investigating the council has to have reason. There are probably getting on for 500 claimants to each benefit officer so the odds are stacked in favour of the benefit thieves.