Security of Payment in AustraliaA national overview

The Act gives a party who carries out construction work, or supplies related goods and services, an entitlement to receive and recover progress payments — including final payments and retention money — on public and private projects in NSW.

A claimant serves a payment claim on the respondent. Where the claimant is a head contractor, the claim must be accompanied by a supporting statement declaring that subcontractors have been paid. A respondent who does not intend to pay the full claimed amount must serve a payment schedule within the statutory timeframe, stating the scheduled amount and the reasons for withholding. Failing to do so generally exposes the respondent to liability for the full claimed amount.

Applications are lodged with an authorised nominating authority, which nominates an adjudicator. Determinations can be converted into a judgment debt through an adjudication certificate.

Owner-occupier construction contracts were exempt until 1 March 2021, when the exemption was removed. Homeowners who receive a payment claim now have obligations under the Act, including in relation to payment schedules. Head contractors on projects valued at $20 million or more must hold subcontractor retention money in a trust account with an approved deposit-taking institution, keep a ledger, and provide it to the subcontractor at prescribed intervals.

Verify current requirements with Building Commission NSW and the NSW legislation website. A broader reform package was considered during 2025 but did not proceed.

The Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025 (Vic) commenced on 15 April 2026. According to Victoria's building regulator, the changes include: removal of the dual “claimable variations” and “excluded amounts” concepts; replacement of reference dates with a monthly entitlement to make a payment claim, with a limited December exception; extension of the time to make a payment claim from three months to six months; capping of payment and release terms at 20 business days; a new statutory entitlement to claim the release of performance security; new rules on when a party may have recourse to performance security; and a provision allowing notice-based time bars to be declared unfair.

The amendments apply to construction contracts entered into before, on or after 15 April 2026, with exclusions. Broadly, they do not apply to payment claims served, or adjudication applications made but not determined, before commencement. The definition of business day now excludes 22 December to 10 January, reflecting the industry shutdown period.

Victoria was previously the only Australian jurisdiction that excluded a broad category of claims — including many variation and delay claims — from the statutory process. That distinction has now been removed, bringing Victoria closer to NSW and WA.

Any guidance published before April 2026 should be treated as out of date. Verify current requirements with Victoria's building regulator and the Victorian legislation website.

The BIF Act consolidated and replaced the earlier Building and Construction Industry Payments Act 2004 and the Subcontractors' Charges Act 1974. It provides processes for progress payments, adjudication of payment disputes, subcontractors' charges, and a trust account framework.

A contractor submits a payment claim — which may take the form of an invoice — for construction work or related goods and services. The respondent must either pay in full or give a payment schedule within the timeframe set by the Act. Queensland is administered differently from the nominating authority jurisdictions: adjudication applications are made to the QBCC's adjudication registry, which appoints the adjudicator.

Queensland also retains a statutory charge mechanism allowing a subcontractor, in defined circumstances, to secure payment against money payable up the chain. This has no direct equivalent in most other jurisdictions.

The trust account framework covers progress payment and retention amounts. It currently applies to Queensland Government and hospital and health service contracts valued at $1 million or more, and to private sector, local government, statutory authority and government-owned corporation contracts valued at $10 million or more. On 31 January 2025, a proclamation paused the further rollout of the framework to lower-value contracts, and no new commencement dates have been confirmed.

Verify current thresholds and requirements with the QBCC, Business Queensland and the Queensland legislation website.

The 2021 Act applies to construction contracts entered into on or after 1 August 2022 and moved WA from a payment-dispute model to an east-coast style claim and schedule model. For contracts entered into before that date, the Construction Contracts (Former Provisions) Act 2004 (WA) continues to apply — so identifying the contract date is the first step in any WA payment question.

The Act creates a statutory right to progress payments and requires a respondent to issue a payment schedule with reasons. Only the reasons stated in the payment schedule may be relied on later in an adjudication response. It prescribes maximum payment periods measured from the date of the payment claim — broadly 20 business days for head contracts and 25 business days for subcontracts — with different arrangements for home building work. Shorter contractual periods prevail.

The adjudication application window is short: broadly 20 business days from when the claimant first becomes entitled to apply, with a notice-and-second-chance process where no payment schedule was given. Adjudicators generally determine applications within 10 business days, extendable by agreement up to a further 20 business days. A notice-based time bar may be declared void where compliance is not reasonably possible or would be unreasonably onerous.

The retention money trust scheme applies to construction contracts valued at $20,000 or more entered into from 1 February 2024, having previously applied from a $1 million threshold. Parties cannot contract out of it. A Building and Construction Industry (Security of Payment) Amendment Bill 2026 was introduced to the WA Parliament in 2026, proposing to replace project bank accounts with a statutory construction trust scheme on State Government projects.

Confirm the current status of that Bill, and verify current requirements with the WA Building Commissioner and the WA legislation website.

The Act is directed primarily at commercial and non-owner-occupied building work. It gives a person who carries out construction work, or supplies related goods and services, an entitlement to progress payments, and provides a rapid adjudication process for payment disputes.

SA follows the payment claim and payment schedule structure, with statutory response timeframes and consequences for failing to serve a schedule. Applications are made to authorised nominating authorities, which appoint adjudicators. The Small Business Commission SA can explain how the Act works and refer parties to the appropriate authority, though it does not provide legal advice.

Separately from the Act, the Fair Trading (Building and Construction Industry Dispute Resolution Code) Regulations 2017 set expectations for how parties engage when certain building and construction disputes arise, including disputes about unpaid progress claims.

Amendment Bills introduced in 2017 and 2021 — the latter proposing to implement most of the Murray Review recommendations — did not pass. New Building and Construction Industry Security of Payment Regulations 2026 have been made to replace the 2011 Regulations.

Do not assume that guidance written for another jurisdiction describes the SA position. Verify current requirements with the SA legislation website and the Small Business Commission SA.

The Act provides for progress payments to be made in a timely way under building or construction contracts, and for payment disputes to be adjudicated informally and quickly. A payment claim must be in writing, identify the work or goods and services, state the amount claimed, and state that it is made under the Act.

A respondent who does not intend to pay the full amount must serve a payment schedule. According to the Tasmanian regulator, respondents generally have 10 business days to do so.

Tasmania applies the Act to residential home owners who live in, or intend to live in, the dwelling where the work is carried out. Several timeframes are extended where the respondent is a home owner — for example, the default payment period where the contract is silent. A home owner who receives a payment claim and does nothing risks an adjudication determination against them.

Claimants must give notice of an intention to proceed to adjudication within the statutory window, and the respondent is given a further short opportunity to provide a payment schedule before an application can be made. Nominating authorities authorised by the Tasmanian Government appoint adjudicators.

Verify current requirements with Consumer, Building and Occupational Services (CBOS) and the Tasmanian legislation website.

The Act provides a rapid adjudication process so that contractors and subcontractors can pursue outstanding payments without litigation. It was amended with effect from 11 March 2024 to align more closely with the Murray Review recommendations and the NSW position.

The Building and Construction Legislation Amendment Act 2023 removed the concept of a reference date, allowed a payment claim to be made on the last day of each calendar month (or an earlier day specified in the contract) or on termination, introduced statutory maximum payment timeframes, and standardised the timeframe for initiating an adjudication application while shortening the waiting period before a claimant notifies the respondent of an intention to apply.

The changes create an entitlement to claim monthly; they do not require monthly claims, and they did not change the latest point at which a payment claim may be made. Applications are made to authorised nominating authorities, which appoint adjudicators.

The reforms applied to both existing and new contracts, and the Act has been further amended since. Verify current requirements with the ACT planning and building regulator and the ACT legislation register.

The Northern Territory is the outlier. Its Act does not use the payment claim and payment schedule model at all — it operates on a “payment dispute” trigger. The Act promotes security of payments under construction contracts and provides for adjudication of payment disputes, and applies irrespective of whether the contract is expressed to be governed by the law of another place. Mining work and wholly artistic work are excluded.

A payment dispute arises when a claimed amount is due under the contract and has not been paid in full, or has been rejected or disputed; when retained money that is due to be paid has not been paid; or when security that is due to be returned has not been returned. Where a contract allows payment more than 50 days from the claim date, the law overrides that term and payment must be made within 28 days of receiving the claim.

According to the NT Government, a party has 65 working days from the date the payment dispute arose to apply for adjudication. Registered adjudicators determine applications on the evidence presented; they do not mediate or conciliate. Where the dispute is below the prescribed monetary threshold, an application may be made to the Community Justice Centre to appoint an adjudicator. The NT uses “working days” rather than “business days”, and refers to prescribed appointers and registered adjudicators rather than authorised nominating authorities.

The NT Act is cited by different sources as the Construction Contracts (Security of Payments) Act 1994 and as the 2004 Act, reflecting its legislative history. Use the NT legislation database for the authoritative citation, and verify current requirements with the NT Construction Contracts Registrar.

Security of payment refers to the state and territory legislation that gives eligible construction participants a statutory right to progress payments and access to a rapid adjudication process for payment disputes. The rights generally exist independently of the contract and, in most jurisdictions, cannot be contracted out of.

All eight states and territories have security of payment legislation, but there is no national Act. Terminology, eligibility, timeframes and processes differ. Most jurisdictions use a payment claim and payment schedule model; the Northern Territory uses a payment dispute model instead.

A written claim by a party who has carried out construction work or supplied related goods and services, identifying the work, stating the amount claimed and — in most jurisdictions — stating that it is made under the relevant Act. Form and timing requirements vary by jurisdiction.

A payment schedule is the respondent's written response to a payment claim, stating the amount they propose to pay and the reasons for withholding any part of the claimed amount. It exists in most Australian jurisdictions but not in the Northern Territory. Failing to serve one in time generally has serious consequences.

Adjudication is a fast, documents-based determination of a payment dispute by an independent adjudicator, made to statutory deadlines. It determines what is payable on an interim basis and does not finally determine the parties' contractual rights, which can still be pursued through the contract's dispute process, arbitration or the courts.

No. The core principles are broadly similar, but each jurisdiction legislates separately. Deadlines, notice requirements, eligibility, adjudication procedures, retention and trust requirements and terminology all vary — and reforms have changed several jurisdictions in recent years, including Victoria in April 2026.

A legislated requirement that particular construction money be held on trust rather than in a general account. Queensland's project trust account framework, NSW's retention money trust requirements and WA's retention trust scheme are Australian examples. Coverage, thresholds and commencement differ, and have changed more than once.

It depends on the jurisdiction. Owner-occupier construction contracts have been within the NSW Act since 1 March 2021, and Tasmania's Act expressly applies to residential home owners with extended timeframes. South Australia's Act is directed primarily at commercial and non-owner-occupied work. A homeowner who receives a payment claim should check the position in their jurisdiction promptly, because doing nothing can have consequences.

No. Where a statutory right exists, it exists because of the applicable Act — not because of any platform. PayLocker is a construction payment integrity platform designed to operate alongside existing contracts, payment processes and regulatory frameworks, not in place of them. It does not replace security of payment legislation, adjudication processes, statutory trust frameworks, builders, banks, insurers, regulators or certifiers.

No. PayLocker is not a law firm, a bank, an insurer, a regulator, a certifier or a statutory adjudicator. This page is general information only and is not a substitute for advice about a specific contract, claim or dispute.

Identify where the construction work is being carried out, then work to that jurisdiction's legislation. Check the date the contract was entered into as well — in Western Australia, for example, contracts entered into before 1 August 2022 remain under the former provisions Act. Confirm current requirements with the relevant government body listed in the sources above.