Murphy and Secretary, Department of Social Services (Social services second review)

This matter concerned an appeal by Mr Murphy against a decision by the Secretary of the Department of Social Services regarding an overpayment of Austudy allowance. The dispute centred on whether the debt arising from this overpayment should be written off. The decision was made by D K Grigg M.

The primary legal issues before the court were whether Mr Murphy received the overpayment in good faith and whether the debt, or a proportion of it, was attributable solely to an administrative error, pursuant to sections 1237A and 1236 of the relevant Act. The court was required to consider Mr Murphy's obligation to notify the Department of changes in his circumstances and the meaning of "good faith" in the context of receiving social security payments.

The court reasoned that a recipient of a social security benefit has a statutory obligation to notify the Department of any changes in circumstances that may affect payment within 14 days. The Department had sent multiple notices to Mr Murphy detailing this obligation, which were addressed to his correct residential address. While Mr Murphy stated he did not recall receiving these notices, the court noted that wilful blindness can constitute a state of mind relevant to good faith. The court applied the ordinary meaning of "good faith," which requires considering the recipient's subjective state of mind. A lack of good faith arises from a positive belief that a payment was made by mistake, or a suspicion or doubt about entitlement coupled with an objective basis for that suspicion or doubt. The court found no indication that it was not cost-effective for the Department to recover the debt, and therefore, no basis for writing off the debt under section 1236 of the Act.

The Tribunal affirmed the decision under review.