Every Australian state and territory has a Security of Payment Act that gives people who carry out construction work or supply related goods and services a statutory right to claim progress payments. In Queensland it is the Building Industry Fairness (Security of Payment) Act 2017 (BIFSA); in New South Wales, the Building and Construction Industry Security of Payment Act 1999; in Victoria, the Building and Construction Industry Security of Payment Act 2002; and in the ACT, the Building and Construction Industry (Security of Payment) Act 2009.
The legislation is deliberately fast and informal. Its purpose is to keep cash flowing down the contracting chain during a project, rather than leaving payment disputes to be resolved by expensive, slow litigation at the end.
The security of payment framework
Each Act creates a statutory right to progress payments that exists independently of the contract between the parties. Even if the contract purports to delay or deny a progress payment, the Act may override it. Contractual "pay when paid" clauses — where a head contractor claims it cannot pay a subcontractor until it is paid by the principal — are generally prohibited.
The key steps under most regimes are: make a valid payment claim; receive (or not receive) a payment schedule; if unpaid, either apply for adjudication or sue for the debt. The timeframes for each step are short and the consequences of missing them can be severe.
Progress claims
A progress claim (or payment claim) is the formal document by which a claimant asserts a right to a progress payment for work done or goods supplied in a reference period. To be valid under the relevant Act, a payment claim must:
- Identify the construction work or goods to which it relates.
- State the amount claimed.
- Indicate that it is made under the relevant Act (in some jurisdictions, this is a required statement; in others it is recommended practice).
In Queensland, progress claims under BIFSA must be served on reference dates specified in the contract or, if none, on the last day of each named month. Get the reference date wrong and the claim may be premature or out of time.
Payment schedules
When a claimant serves a valid payment claim, the respondent (the party being claimed against) must respond with a payment schedule within the time set by the relevant Act — typically 10 to 15 business days, but this varies by state and by whether the claim is under an "excluded amount" threshold. The payment schedule must:
- Identify the payment claim to which it responds.
- State the amount the respondent proposes to pay (which may be zero).
- If the proposed payment is less than the claimed amount, state reasons for withholding payment.
Failing to provide a valid payment schedule within time can make the full claimed amount due and payable as a debt — enforceable in court without needing adjudication.
Adjudication
If the respondent provides a payment schedule for less than the claimed amount, or fails to pay a scheduled amount, the claimant can apply for adjudication. An adjudicator is an independent person appointed by an authorised nominating authority. Adjudication is designed to be fast: most determinations must be made within 10 to 15 business days of the adjudicator's acceptance of the application.
The adjudicator considers the payment claim, the payment schedule (if any), the contract, submissions from both parties (within tight timeframes), and any relevant laws. The determination is binding on the parties for the purposes of the project, but is not final — either party may still have their rights determined in arbitration or litigation after the project ends.
Enforcing a determination
An adjudication determination in your favour is enforceable as a judgment debt. In most jurisdictions you can file the determination (or a certificate based on it) with a court and proceed to enforcement — garnishee, sheriff's enforcement, or other judgment enforcement steps — without the delay of a full hearing. The respondent can suspend the enforcement only in limited circumstances.
In Queensland, BIFSA also provides for project bank accounts (PBAs) on eligible government and private projects, which hold retention and disputed payments separately from a head contractor's general funds — a significant structural protection for subcontractors.
Where Merion fits in
Many overdue construction accounts do not need the Security of Payment process at all — a clear, well-documented demand from a commercial recovery firm resolves the majority. Where a matter genuinely requires the statutory pathway or legal recovery, we coordinate with qualified construction law practitioners and give you a frank view of which path makes sense before anything proceeds.
If you are a contractor, subcontractor or supplier with an unpaid progress claim, the first step is understanding whether the Security of Payment process is appropriate and whether your deadlines are still open. Talk to us early.
This guide is general information only. It does not constitute legal or financial advice. For advice specific to your situation, consult a qualified professional.