Plaid Cymru-led Caerphilly County Borough Council has frozen the allowances paid to its 73 members for a second year running.
The Plaid group had recommended that rises proposed by the Independent Remuneration Panel for Wales should not be accepted.
It would have increased payments to Plaid council leader Lindsay Whittle and the other eight Plaid and Independent cabinet members by up to £4,400 a year.
Councillor Allan Pritchard, cabinet member for constitutional affairs, also proposed that the basic allowance for all councillors should also be pegged at the 2008/09 level.
Otherwise, it would have given all 73 councillors an increase of around £800 a year. The freeze was unanimously accepted by the whole council.
Councillor Pritchard, who represents Oakdale, said: “Allowances for councillors have not been increased since Plaid took control of the authority in May, 2008.
“We believe it would be totally wrong for councillors to accept big increases at a time when many residents and local businesses are suffering badly from the terrible impact of the worst economic crisis for more than 50 years.
“MPs have been rightly condemned for having their snouts in the trough at Westminster but our decision shows that not all politicians are the same. We are here because we believe in public service. We are not here to squeeze as much money as we can out of the public purse.
“As a Plaid-led administration we aimed for a cost neutral budget for councillors allowances and I’m delighted we managed to come in with savings on last year’s allowances.”
The freeze on means that each councillor now receives a basic allowance of £13,030.
Councillors taking on extra responsibilities, such as members of the cabinet and leader, receive a further Special Responsibility Allowance (SPA).
Council leader Lindsay Whittle currently receives a total allowance of £47,627.
This is a SRA of £34,597 and basic allowance of £13,030, the maximum levels set by the Panel for 2008/09.
The deputy leader currently receives a ‘Senior Salary’ of £32,058, equivalent to a basic allowance of £13,030 and £19,028 SRA.
Cabinet members currently receive a ‘Senior Salary of £30,328, equivalent to a basic allowance of £13,030 and £17,298 SRA.