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Security Of Payment Act Payment Schedule

What Is A Security Of Payment Act Payment Schedule?

A Security Of Payment Act Payment Schedule is the document that a “respondent” serves on a “claimant” in response to a payment claim.

Under the New South Wales legislation, for example, (and most other state legislations are very similar) it is dealt with in section 14 of the Building & Construction Industry Security Of Payment Act 1999.

An excerpt from the legislation follows immediately below;

14 Payment schedules

(1) A person on whom a payment claim is served (the
“respondent” ) may reply to the claim by providing a payment schedule to the claimant.

(2) A payment schedule:

(a) must identify the payment claim to which it relates, and

(b) must indicate the amount of the payment (if any) that the respondent proposes to make (the
“scheduled amount” ).

(3) If the scheduled amount is less than the claimed amount, the schedule must indicate why the scheduled amount is less and (if it is less because the respondent is withholding payment for any reason) the respondent’s reasons for withholding payment.

(4) If:

(a) a claimant serves a payment claim on a respondent, and

(b) the respondent does not provide a payment schedule to the claimant:

(i) within the time required by the relevant construction contract, or

(ii) within 10 business days after the payment claim is served,

whichever time expires earlier,

the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates.

What You Need To Know About A Security Of Payment Act Payment Schedule If You Have Received a Payment Claim Which Has Been Made Under The Security Of Payment Act.

If you have received a payment claim made under Security Of Payment Act legislation there are serious consequences for you if you do not serve a valid payment schedule on the claimant in reply.

As you can see above, but depending on which state the work was carried out in, you must serve a payment schedule within 10 business days of receiving a payment claim.

If you don’t serve a payment schedule within the time allowed, the amount claimed becomes a statutory debt and you are liable to pay the full amount by law.

You may be given a second opportunity by the claimant, in NSW it is called a 17/2 notice, and this gives you a further 5 business days to serve a payment schedule in reply.

But be warned: You are taking a serious risk in assuming you will get a second chance.

A Payment Schedule must be served within 10 business days (NSW) of receiving a Payment Claim and you are best advised to do this well within time.

Note very carefully, a Payment Schedule MUST identify the Payment Claim to which it relates.

And a Payment Schedule MUST schedule an amount to be paid. This can be nil, the full amount or anywhere in between, whichever the case may be.

If you do not intend to pay the full amount of the payment claim you should set out the reasons why you believe it is right for you to withhold part or full payment.

If you don’t provide reasons in the payment schedule why you are not paying the full amount you will not be allowed to include any reasons for non payment in your adjudication response. This will likely mean that an adjudicator will order you to pay the full amount to the claimant plus costs, plus interest. Be warned !!

Finally, it can not be stated strongly enough; if you wish to defend a payment claim made under the security of payment act you must prepare a valid and effective payment schedule, and you must effect “proper service”.

For help with this complete this online payment schedule form and we will review your situation and assist you with defending the claim made against you