Security of payment

Security of payment laws exist so that cash keeps flowing down the contracting chain. They do not replace the contract. They sit beside it and give the claimant a fast, interim way to get paid, with any final argument left for later.

The basic process is similar everywhere. The claimant serves a payment claim. The respondent has a short, fixed time to serve a payment schedule saying how much it will pay and why. If it pays less than claimed, or doesn't respond, the claimant can apply for adjudication or, in some cases, recover the amount as a debt in court. An adjudicator decides quickly, and the amount must be paid.

The Acts generally cannot be contracted out of. A clause that tries to exclude or limit the Act is usually void.

The Acts also usually give the claimant other remedies if the adjudicated or scheduled amount is not paid, such as the right to suspend work after giving notice, and in some states the right to have the principal withhold money owed further up the chain. These rights vary between states, so check before relying on them.

Each jurisdiction has its own legislation, and the details differ:

• NSW. Building and Construction Industry Security of Payment Act 1999.

• Victoria. Building and Construction Industry Security of Payment Act 2002, significantly amended from 15 April 2026.

• Queensland. Building Industry Fairness (Security of Payment) Act 2017, known as the BIF Act.

• Western Australia. Building and Construction Industry (Security of Payment) Act 2021.

• South Australia. Building and Construction Industry Security of Payment Act 2009.

• Tasmania. Building and Construction Industry Security of Payment Act 2009.

• ACT. Building and Construction Industry (Security of Payment) Act 2009.

• Northern Territory. Construction Contracts (Security of Payments) Act 2004.

Time limits, what counts as a valid claim, who can adjudicate and the rules on residential work all vary. Always check your state's Act rather than relying on what applied on your last interstate job.

The contract sets the agreed payment process: claim dates, assessment, certificates and payment terms. The security of payment Act sets minimum rights that apply regardless.

Where the contract is more generous, it usually applies. Where it is less generous, for example longer payment terms than the Act allows, the Act overrides it. NSW, for instance, caps payment at 15 business days for head contractors and 20 business days for subcontractors after a payment claim is made. Several Acts also deal with pay when paid clauses, which are generally of no effect.

• Missing the payment schedule deadline. This is the most expensive mistake a respondent can make, because it can leave them liable for the whole claim.

• Giving thin reasons. In most states the respondent cannot raise new reasons in adjudication that were not in the payment schedule.

• Assuming one state's rules apply everywhere. Timeframes and forms differ between states.

• Ignoring the claimant's side. Claimants also lose rights by serving claims on the wrong date or applying for adjudication out of time.

Weak records. Claims and payment schedules are only as strong as the site diaries, photos and correspondence behind them. Keep them from day one, not once the dispute starts.