The Security of Payment Act Explained
Law made for people who aren’t getting paid for their work
Before 1999, a contractor who wasn’t paid usually had two choices: go to court, or walk away. Court was slow, expensive and uncertain, so many small businesses gave up on money they had earned. The parties with the deepest pockets could hold out the longest.
Security of payment laws changed that. Anyone who carries out construction work, or supplies related goods and services, now has a legal right to progress payments, and a fast, low-cost way to enforce it. Payment can’t be withheld without a proper reason, and claims can’t be ignored.
The need is real. The NSW Collins Inquiry into construction industry insolvency found that subcontractors provide much of the working capital on most projects, while carrying the greatest risk.
How it works, step by step
- Payment claim: you serve a payment claim on the party that owes you.
- Payment schedule: they have a short, fixed time to pay or reply with a payment schedule saying what they’ll pay and why. If they don’t, they’re liable for the full amount.
- Notice (most states): if there’s no schedule and no payment, you usually serve a notice giving them one last chance. Queensland and the NT have no notice step.
- Adjudication application: you apply for adjudication, and the respondent can lodge a response.
- Determination: an independent adjudicator decides how much is payable, when, and whether interest applies, often within a few weeks.
- Payment or enforcement: the respondent usually has 5 business days to pay. If they don’t, an adjudication certificate can be filed in court as a judgment and enforced.
The whole process often takes around six weeks.
The ground rules
- There must be a construction contract (written, verbal or a mix) between you and the respondent.
- The work must have been done, or the goods and services supplied.
- The claim must be served on time, in the correct form, and served properly.
- Every later step has a strict time limit. Miss one and the claim can fail.
Can a determination be challenged?
Only on narrow grounds, mainly that the adjudicator lacked jurisdiction or denied a party natural justice. In NSW, for example, a respondent who applies to set aside the judgment must pay the disputed amount into court as security. Disagreeing with the adjudicator isn’t enough.
The law in each state and territory
Each state and territory has its own Act. They work in similar ways, but the time limits and details differ:
| State | Legislation |
|---|---|
| NSW | Building and Construction Industry Security of Payment Act 1999 |
| VIC | Building and Construction Industry Security of Payment Act 2002 |
| QLD | Building Industry Fairness (Security of Payment) Act 2017 |
| WA | Building and Construction Industry (Security of Payment) Act 2021 |
| SA | Building and Construction Industry Security of Payment Act 2009 |
| TAS | Building and Construction Industry Security of Payment Act 2009 |
| ACT | Building and Construction Industry (Security of Payment) Act 2009 |
| NT | Construction Contracts (Security of Payments) Act 2004 |
Security of payment regulations
Each Act has regulations that fill in the detail, such as approved forms, fees and nominating authorities. Your state’s official legislation website publishes the current Act and its regulations, along with the cases that have interpreted them.
Questions contractors often ask
What do I put on my invoice to make it a payment claim?
In most states, a statement that it’s made under the Act. See our state-by-state wording.
I don’t have a written contract. Can I still claim?
Yes. Verbal and partly written agreements are covered, but you’ll need evidence of what was agreed.
Can I claim variations without a written instruction?
Often yes, but you’ll need to prove the variation was requested and its value. Good records are critical.
I’ve waited two years to be paid. Can I still use the Act?
It depends on when you last did work on the job and your state’s time limit, for example 12 months in NSW and 6 months in Queensland. Contact us and we’ll check.
Can I claim retentions?
Yes. Retention money that’s due for release can be included in a payment claim.
We support you at every step
We’ll tell you what to do, how and when. We can do it for you:
- prepare and serve your payment claim;
- assess any payment schedule;
- serve the notice;
- prepare, lodge and serve your adjudication application;
- handle requests for further submissions;
- enforce the determination.
We’ll also help you avoid slow-payer traps next time.
Need help?
Call or contact us.
This page is general information, not legal advice. Last reviewed October 2026.