Darren Dommett, from Grimsby, suffered a fall at home in 2013 after he developed cauda equina syndrome, which causes nerves in the lower back to be severely compressed.
Although the condition requires quick treatment, it was not initially diagnosed when he went to the Diana, Princess of Wales Hospital in Grimsby.
He was first treated for the syndrome a week later after visiting his GP, later saying this delayed diagnosis had left him with a permanent disability.
In his compensation claim against the NHS, Mr Dommett maintained that he was unable to work and required a wheelchair or wheeled walking frame whenever he left his house.
As a result, he lodged a £1.5-million claim against the Northern Lincolnshire and Goole NHS Foundation Trust, which accepted liability but contested the amount they should pay.
However, NHS investigators then found social media photos showing him on holiday in Spain in July 2017 without either a wheelchair or a rollator.
Secretly recorded videos later captured him walking without any assistance and also unloading furniture from a van.
Mr Dommett, who now faces two years in prison for contempt of court, consequently settled his claim with the NHS trust for £60,000.
Barrister James Todd QC said the defendant was not suffering from “significant pain and disability” at the time of his claim, and was “fabricating and/or grossly exaggerating” his condition to seek more money.
He noted that Mr Dommett had made a good recovery from cauda equina syndrome, with the surveillance footage suggesting his disability “was very minor, if there was any disability at all”. His “lies” had caused “very large amounts of resources to be expended unnecessarily”, Mr Todd added.
The barrister concluded: “Had the defendant not been confronted with the surveillance and other evidence of his dishonesty, and had he persisted in his dishonest statements, it is inevitable that there would have been continuing interference with the course of justice.
“He may have been awarded a greater sum in damages than that to which he was properly entitled.”
Mr Dommett will be sentenced later in the summer after the case was delayed from earlier this month.