Security of payment for subcontractors | Department of Housing and Public Works

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 Security of payment for subcontractors

Security of payment is about making sure everyone in the contractual chain gets paid for work done or goods supplied by a subcontractor. Subcontractors are particularly vulnerable because they are generally further down the payment chain.

Security of payment in the construction industry is important - it is about making sure subcontractors get paid on time, every time. This is not just important for subcontractors and their families, it is important for Queensland’s economy and productivity.

From 17 December 2015 to 31 March 2016, the Queensland Government released a Security of Payment discussion paper (PDF, 141MB) to seek feedback from industry and the community on how best to tackle this issue for subcontractors.

The discussion paper included a series of options for the public to consider:

  • Option 1—Project Bank Accounts: A project bank account facilitates simultaneous payments of a project's head contractor and all participating subcontractors through a trust arrangement.
  • Option 2—Retention Trust Fund Scheme: This option requires subcontractors’ retention money to be held in a separate trust account.
  • Option 3—Insurance schemes: This option includes a range of insurance schemes to safeguard against defects, late completion and insolvency of contractors.
  • Option 4—Federal legislative changes: This option seeks to lobby the Commonwealth government for reform to Commonwealth legislation relating to security of payment.
  • Option 5—Education: This option proposes education for the building and construction industry stakeholders regarding matters such as financial management and business management.

Finally, the discussion paper seeked feedback on the 2014 amendments to the Building and Construction Industry Payments Act 2004, as well as the Subcontractors’ Charges Act 1974 and the Queensland Building and Construction Commission’s Minimum Financial Requirements Policy.

The findings from these responses are currently being compiled.

State-wide consultation sessions

The department held a series of consultation sessions across the State from
28 January 2016 until late March. These consultation sessions have now finished and we thank all the interested people from the building and construction industry and the community for attending.

Additional materials

More information

If you have any questions regarding the discussion paper, please email

Last updated 31 March 2016    

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