Cllr Lawless was given a two-year conditional discharge after he admitted three charges of failing to notify a change in circumstances which he knew affected his entitlement to benefit at Slough Magistrates Court on Friday.
He received £4,839.11 in housing benefit overpayments between May 16, 2011 and January 6, 2014 after he did not declare his council member's allowance, through which he earned £19,590.48 in that time.
The 62-year-old, of Eton Wick Road, has since resigned from the Conservative group, but he will continue as a member of the council as an independent.
"I have resigned from the Conservative Group only and l will continue to represent the residents of Eton Wick until at least next May," he said.
"My personal finances aside, serving the community is in my DNA, putting residents needs before bureaucracy and politics.
"l intend to achieve the remaining goals l set myself for improvements in my village within my current term but it's too early to say what l will be doing after May 2015."
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The crash, which took place at about 7am today (Thursday), involved three vehicles. One man sadly died as a result of the collision and his next of kin have been informed.