The building and construction industry must follow legal obligations and processes to protect contractor payments.

The Building Industry Fairness (Security of Payment) Act 2017 was passed to ensure everyone gets paid for the work they do.

The Queensland Government has strengthened and expanded its safeguards for subcontractor payments as a result of an evaluation conducted by the Building Industry Fairness Reforms Implementation and Evaluation Panel and the work of the Special Joint Taskforce.

Email securityofpayment@epw.qld.gov.au with queries about these requirements.

Paying contractors

Progress payments

To get paid, a contractor must submit a payment claim (which may be an invoice). This is a written request for payment for construction work or related goods and services delivered under a construction contract.

When a respondent receives the payment claim, they must either pay in full or give the contractor a payment schedule within a specific time frame.

Read more about payment claims and payment schedules.

Trust account framework

The trust account framework aims to protect progress payment and retention amounts for industry contractors and subcontractors.

The contracted party (generally the head contractor) must determine whether a trust account for their contract is needed based on set criteria, and then establish and operate the trust account accordingly. They will need:

• 1 project trust account for each eligible contract
• 1 retention trust account per contractor to hold cash retentions for all of the contractor's eligible contracts.

Contract payments must be made into an account, and contractors/subcontractors will be paid from the account.

Read more about types of trust accounts and their phased commencement.

Payment disputes

Adjudication

Adjudication is a dispute resolution process to help resolve disagreements about progress payments and money owed. It's a quick, cost-effective alternative to court.

If there's a dispute about an amount owed, the contractor can make an adjudication application to the Adjudication Registrar.

The Registrar refers the application to an adjudicator to consider the disputed payment claim. The adjudicator's decision is enforceable in a court.

Read more about the adjudication process.

Subcontractors' charges

A subcontractors' charge provides a way for subcontractors to secure payment of amounts owed to them under a contract by someone higher in the contractual chain.

To claim a subcontractors' charge over money payable, the subcontractor issues a notice of claim form to the contractor and the person who engaged the contractor (the superior contractor). The contractor must then respond to the claim and the superior contractor must retain money that is, or will be, payable to the subcontractor to satisfy the claim.

Subcontractors should always seek legal advice before submitting a notice of charge.

Read more about subcontractors' charges.

Note: A subcontractor can't use both subcontractors' charges and adjudication; they must pick one. Read more about the various dispute resolution options.

Financial reporting

Licensees must report their financial information, or continued compliance with the Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018 and minimum financial requirements (MFR) policy, at certain times.

Under the MFR Regulation, licensees must declare their revenue and net tangible assets every year.

These laws enable the Queensland Building and Construction Commission (QBCC) to better detect and mitigate the effect of potential insolvencies and corporate collapses. This protects everyone working in Queensland's building and construction industry.

Read more about minimum financial requirements for licensees.

The MFR Regulation introduced a range of changes to reporting requirements for licensees. Read about changes to the reporting requirements.

QBCC powers

The QBCC has powers to enforce compliance, and protect consumers and licensees who do the right thing.

Read about the QBCC's powers to regulate and protect the industry.

Changes to the legislation

The Building Industry Fairness Reforms were developed under the Queensland Building Plan (QBP) 2017 and QBP Update 2021 to improve security of payment for subcontractors.

This included:

• creating one Act to support these reforms – the Building Industry Fairness (Security of Payment) Act 2017
• expanding the QBCC's powers under the Queensland Building and Construction Commission Act 1991.