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Skip Navigation LinksDepartment of Housing and Public Works > Construction > Building and plumbing > Building > Security of payment

Security of payment

Queenslanders who work in our building and construction industry make an invaluable contribution to our communities and the economic prosperity of our state. They deserve to be paid for the work they do.

Our Building Industry Fairness Reforms aim to help give them the confidence to that this will happen. The Building Industry Fairness (Security of Payment) Act 2017 commenced on 10 November 2017 to support these reforms.

On this page:

Visit our Building Plan website to read about how we’re working to create a safer, fairer and more sustainable construction industry.

One security of payment Act

A new Security of Payment Act is planned for release from mid-late December 2018, with the aim of protecting payments to subcontractors in one easier to find and interpret Act.

It will provide a holistic view of Queensland’s comprehensive security of payment regime.

This new Act will incorporate provisions from existing Acts including the Building and Construction Industry Payments Act 2004, the Subcontractors’ Charges Act 1974 and also Project Bank Accounts.

Building Industry Fairness Reforms

A series of reforms to improve security of payment for subcontractors have been introduced through the Building Industry Fairness (Security of Payment) Act 2017.

These reforms are being commenced in stages. The first stage, introducing project bank accounts on government building contracts with a value between $1 million and $10 million (including GST), commenced on 1 March 2018. The second stage, including reforms to progress payments, adjudication and subcontractors’ charges, will commence on 17 December 2018.

The second stage of reforms includes a fairer progress payment process, increasing the independence of the adjudication registry, streamlined adjudication procedures and the modification and simplification of the provisions in the present Subcontractors’ Charges Act 1974. The reforms also include amendments to the Queensland Building and Construction Commission Act 1991 to:

  • provide for a statutory defects liability period of 12 months where none is provided in the contract
  • require head contractors to inform subcontractors of the end of the defects liability period
  • return security or retentions that are no longer required to be held.

On 11 September 2018, amendments to the Building Industry Fairness (Security of Payment) Act 2017 commenced. The amendments were made during consideration in detail of the Plumbing and Drainage Act 2018. These amendments provide minor clarifications to assist industry in the implementation of project bank accounts and progress payments. These amendments have:

  • clarified protections for subcontractors
  • ensured that, based on industry feedback, provisions do not impose an additional burden on those paying claims in full 
  • give greater certainty of cashflow to industry.

Stage two - Progress Payments and Subcontractors’ Charges

The second stage of the Building Industry Fairness Reforms will take effect from 17 December 2018 and include:

  • changes to the process for payment claims for construction work and payment schedules
  • changes to the adjudication of payment disputes, including new application timeframes of up to 30 business days
  • incorporation of simplified and modernised subcontractors’ charges provisions, which will enable unpaid subcontractors to place a charge on payments due to the person owing money to the subcontractor.

These provisions will replace the existing Building and Construction Industry Payments Act 2004 and Subcontractors’ Charges Act 1974.

Importantly, when the progress payment changes come into effect, payment claims for construction work or related goods or services will no longer require specific wording for the protections of the Act to apply (commonly referred to as ‘endorsement’).

This means there is now a requirement to respond to every payment claim for a progress payment by either:

  • paying the claimed amount in full by the due date OR
  • responding to the claim with a payment schedule.

A payment schedule will be required to be provided within 15 business days of receiving a payment claim or earlier if provided for in the contract unless paying in full by the due date. There are no changes to the due date for payment. This continues to be in accordance with your contract, or within the timeframes prescribed in Part 4A (ss 67U and 67W) of the QBCC Act.

A maximum penalty of 100 penalty units ($13,055) may apply where a person fails to provide a payment schedule by the due date or does not pay the claimed amount in full by the due date.

For more information read the following: 

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Changes to Minimum Financial Requirements for licensing

New laws that strengthen the Minimum Financial Requirements for licensing will commence in 2019, with phase one beginning on 1 January 2019.

Read about these important changes to find out what it means for you.

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Project Bank Accounts

Project Bank Accounts (PBAs) are established for certain projects to safeguard progress payments, protect retention monies and allow for more timely payments to subcontractors.

Since 1 March 2018, projects tendered by the Queensland Government have used PBAs on building and construction projects (excluding engineering projects) valued between $1 million and $10 million. Following successful implementation, this model is set to apply to private sector projects valued from $1 million. However, this will not occur before 1 March 2019.

Find out more about PBAs

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Building Industry Fairness Implementation and Evaluation Panel

The Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) allows for the appointment of a Building Industry Fairness Reforms Implementation and Evaluation Panel.

Find out more about the Panel

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Queensland Building and Construction Commission powers

 

The Building Industry Fairness Reforms also amend the Queensland Building and Construction Commission Act 1991 (QBCC Act) to enhance the QBCC’s ability to regulate the building industry.

The amendments have already taken effect and include:

  • increased and escalating penalties for individuals who perform unlicensed or defective building work
  • a wider definition of ‘influential persons’ to address illegal phoenixing activity
  • a new offence for avoidance of contractual obligations causing significant financial loss.

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Last updated 05 December 2018    Creative Commons Attribution 4.0 International (CC BY 4.0)
 

 More information

 
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If you have any questions regarding Project Bank Accounts or other security of payment reforms:

Email securityofpayment@hpw.qld.gov.au



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