Security of payment legislation — the suite of Acts in each Australian state and territory designed to ensure that parties to construction contracts receive timely payment for work performed — has been subject to ongoing reform. Following recommendations from various state government reviews and the national Building Industry Fairness report, a number of significant amendments have been passed or commenced across jurisdictions in 2024 and 2025. Subcontractors who are not aware of these changes may be missing protections that are now available to them.
Queensland: Building Industry Fairness Act amendments
Queensland's Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) has been the most actively amended security of payment legislation in Australia. Key changes relevant to subcontractors include strengthened project trust account requirements — the obligation on head contractors to hold subcontractor funds in separate trust accounts — with expanded coverage and heavier penalties for non-compliance. The Queensland Building and Construction Commission (QBCC) has also been given additional audit and enforcement powers over trust account compliance. Subcontractors in Queensland should be aware of whether the projects they are working on are subject to trust account requirements, and should report suspected non-compliance to the QBCC.
New South Wales: Building and Construction Industry Security of Payment Act
The NSW SoP regime has been subject to a comprehensive review, and changes to adjudicator appointment processes, timeframes for payment schedules, and the interaction with insolvency proceedings have been either implemented or are in train. NSW has also introduced registration requirements for adjudicators and authorised nominating authorities (ANAs), improving quality control in the adjudication process. Parties to NSW construction contracts should check the current timeframes applicable to payment claims and payment schedules under the updated Act.
Victoria and other states
Victoria's SoP framework has been subject to discussion about reform to align more closely with the Queensland model, particularly regarding the exclusion of residential construction contracts from the Act's coverage. Western Australia's Construction Contracts Act operates differently from the east coast model and has its own reform trajectory. All jurisdictions have seen increased enforcement focus on SoP compliance.
What subcontractors need to know in practice
- Lodge payment claims on time: every SoP Act has reference dates and timeframes for payment claims. Missing the timeframe means waiting for the next reference date. Understand your jurisdiction's specific rules.
- Issue a written payment claim: a tax invoice is not necessarily a compliant payment claim under the SoP Act. Check whether your invoice complies with the Act's requirements and, if not, issue a separate compliant payment claim.
- Respond to payment schedules promptly: if you receive a payment schedule from a head contractor or principal, check its validity and respond within the required timeframe. Failure to respond can restrict your ability to adjudicate.
- Use adjudication early: adjudication is a fast and relatively inexpensive way to resolve payment disputes. Many subcontractors wait too long before using it, allowing disputes to age and leverage to reduce.
Contact Merion if you are a subcontractor with unpaid claims and want advice on using the SoP legislation to recover what you are owed.