Building & Construction Industry Security Of Payment Act 1999 legislation changes that came into force for all building and construction contracts entered into on or after 21 April 2014 now require a head contractor to include a Supporting Statement with all Payment Claims served under the Security Of Payments Act NSW.

It is important to note that the 21 April 2014 changes to the Security Of Payments Act NSW also include penalties for non compliance.

Section 13 of the Building & Construction Industry Security Of Payment Act 1999 legislation now contains the following obligations for head contractors:

A head contractor must not serve a payment claim on the principal unless the claim is accompanied by a supporting statement that indicates that it relates to that payment claim.

Maximum penalty: 200 penalty units.

(8) A head contractor must not serve a payment claim on the principal accompanied by a supporting statement knowing that the statement is false or misleading in a material particular in the particular circumstances.

Maximum penalty: 200 penalty units or 3 months imprisonment, or both.

(9) In this section:

“supporting statement” means a statement that is in the form prescribed by the regulations and (without limitation) that includes a declaration to the effect that all subcontractors, if any, have been paid all amounts that have become due and payable in relation to the construction work concerned.

How you fill out this form is critical!

You can find a sample of the Supporting Statement By Head Contractor Form here

You must serve a copy of the Supporting Statement By Head Contractor Form with your Payment Claim.

You should obtain expert advice on what information you should include and what information you should not include in the Supporting Statement By Head Contractor Form.

The purpose of the obligation on the Head Contractor under the Building & Construction Industry Security Of Payment Act 1999 legislation is to ensure that subcontractors get paid.

The catalyst for the changes to the Building & Construction Industry Security Of Payment Act 1999 legislation was the Reed Constructions Australia fiasco where the NSW Government departments, Roads & Maritime Services and Department Of Education paid Reed for works carried out by Reed’s subcontractors but but Reed didn’t pass on that payment to their subcontractors.

Now any head contractor that does not include a Supporting Statement with their Payment Claim, and remember the 21 April 2014 changes mean that all invoices for construction work and or related goods and services are now payment claims under the Building & Construction Industry Security Of Payment Act 1999 whether they are endorsed as such or not, or knowingly makes a false declaration may be subject to penalties as prescribed in the legislation, penalties that may include imprisonment.

Therefore, because potential exists for such harsh penalties, it is highly recommended that head contractors should seek expert advice before completing the Supporting Statement.

Call RECOUP Contractor Debt Recovery for expert assistance to prepare your Payment Claim and to ensure your Supporting Statement is filled out appropriately.

The Building & Construction Industry Security Of Payment Act 1999 legislation continues to provide the best means of debt recovery for contractors in any position in the contracting chain to resolve all types of payment disputes.

The Building & Construction Industry Security Of Payment Act 1999 legislation ensures contractors are able to obtain their full entitlement under their construction contract, which can be a very simple oral agreement, in a timely and inexpensive manner. Claiming under the Building & Construction Industry Security Of Payment Act 1999 begins with serving a payment claim and ends with applying for adjudication, it can be a very quick and easy 2 step process. If a respondent does not serve a payment schedule in time in response to the payment claim a second notice may be required and even if necessary this addition step may only add an addition week to the process. The process usually takes about six weeks from beginning to end.

Adjudication under the Building & Construction Industry Security Of Payment Act 1999 is a process based on a written application, a written submission and supporting evidence, No “court appearances” are required. RECOUP Contractor Debt Recovery manages the whole adjudication process for their clients. This means RECOUP Contractor Debt Recovery’s clients can get on with their day to day business with minimal distraction.

For contractors working for the head contractor don’t forget New South Wales is the only state where a contractor, at the time of applying for adjudication, can serve a payment withholding request on a principal to enable a principal in due course to pay the contractor directly. This process uses the Contractors Debts Act 1997 to follow through from the Security Of Payments Act NSW where the process begins. RECOUP Contractor Debt Recovery are experts on this process.

Supporting Statement by Head Contractor Fom assistance