Request payment in writing—‘payment claim’
Once you have completed work or delivered relevant goods and services under a construction contract you need to give a payment claim to the individual or company who is, or will be, responsible for paying you money (this person is called the respondent).
Under the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act), a payment claim is a written request for payment, that must contain all of the following information:
- identifies the work or goods and services to which the claim relates
- states the amount being claimed
- requests payment of the amount claimed.
It is important that your payment claim meets these requirements, even if you are using your usual tax invoice. Doing so will ensure you can use the payment dispute resolution options should a dispute over payment arise.
While there is no prescribed format or template for a payment claim, our free commercial subcontract contains a payment claim template which you can use.
Supporting statement for head contractors
From 1 October 2020 new building industry laws require some claimants (head contractors for non-residential construction contracts) to submit a supporting statement with any request for payment (payment claim) to a principal (e.g. owner or developer).
When to submit your payment claim—‘reference date’
A reference date is the date from which you can submit your payment claim. It is either:
- the date stated in your written contract
- if your contract does not state a reference date—the last day of the month the work was carried out or the goods and services were delivered.
A contract may include either:
- one reference date for one-off payments
- multiple reference dates where payments can be claimed weekly, fortnightly, monthly or at other agreed timeframes.
The contract may state reference dates for:
- making claims for progress payments (non-final)
- making a final payment claim
- claiming retentions (e.g. at the end of a defects liability period).
Once you have completed work or supplied goods and services, you are entitled to submit a payment claim – on the day or after – each reference date in the contract. Only one payment claim can be given for each reference date.
Your payment claim may include both:
- work carried out up to the reference date
- any outstanding payments from previous payment claims.
A payment claim submitted before a reference date may be considered invalid and may limit your access to certain payment dispute resolutions options, such as adjudication.
You can still submit payment claims for work you have completed if you don’t have a written contract or if your contract doesn’t specify reference dates.
Time limits for making payment claims
In addition to reference dates, which establish the earliest date for making payment claims, there are also time limits for making payment claims.
A claim that is NOT for a final payment must be given BEFORE the latest of the following:
- the latest date as per the construction contract (if any)
- six months after the completion of all the work or supply of all the goods or services under the construction contract.
A claim for a final payment must be given BEFORE the latest of the following:
- the latest date as per the construction contract (if any)
- six months after the completion of all the work or supply of all the goods or services under the construction contract
- 28 days after the end of the last defects liability period for the construction contract.
Payment claims for terminated contracts
If your contract is terminated and the contract includes a final reference date after termination, you must use this as your reference date.
The BIF Act sets out that the final reference date is the date of termination if:
- your contract is terminated and it does not include a final reference date after termination, or
- your contract has a clause that stops you from making a final payment claim after termination.
Payment claim checklist
Before submitting your payment claim, make sure you:
- follow the payment terms and requirements set out in your contract
- only issue one payment claim for each reference date (a payment claim can include a previously claimed amount which is still outstanding)
- send the payment claim on or after a reference date
- send the payment claim within any relevant maximum timeframes set out in the BIF Act.
When to expect payment
Under the BIF Act, a progress payment or final payment must be paid by the date stated in the construction contract (due date), or if the contract does not state a due date within 10 business days after the payment claim is given to the respondent.
For some contracts, the due date stated in a contract cannot be greater than the following maximum timeframes set out under the QBCC Act, otherwise they become void and the default timeframe of 10 business days applies:
- subcontracts or construction management trade contracts the maximum payment term is 25 business days
- commercial building contracts the maximum payment term is 15 business days.
A person given a payment claim, the respondent, must respond to all payment claims.
No 'pay when paid'
You should not accept any payment terms, stated in your contract or otherwise advised, that you will be paid when the respondent gets paid. These provisions, known commonly as ‘pay when paid’ provisions, are void under the BIF Act. This means they have no effect.
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