Payment claims in NSW: a tradie's guide to the Security of Payment Act

The Building and Construction Industry Security of Payment Act 1999 (NSW) is how a tradie in NSW gets paid for construction work without waiting for a court. It gives you a right to progress payments, a set way to claim them, a deadline for the other side to answer, and a quick independent decision if you disagree. The NSW Government's page says it applies whether you are a head contractor, a subcontractor, a supplier, a plant and equipment hirer or a consultant.

This guide covers NSW only. Every state has its own Act and its own rules; the progress claim template has a free claim form and the main points for Queensland, Victoria and WA as well.

Who the Act covers

The NSW Government's page says all contractors doing construction work, or providing goods or services under a construction contract, have the right to receive progress payments. That holds whether the contract is verbal, written or absent, and even if the contract says you cannot claim progress payments (section 8).

Since 1 March 2021 the Act also covers owner occupier construction contracts: building work on a home where the person who engages you lives there or intends to. Older owner occupier contracts stay under the previous rules. But the NSW FAQ lists work the Act does not apply to, when you contract directly with a person (not a company or a strata owners corporation) who lives or intends to live where the work is done:

• Residential building work where the total cost of labour and materials is less than $5,000
• Electrical wiring work
• Plumbing, draining and gas fitting work
• Air conditioning and refrigeration work (except plug-in appliances)

When you can make a claim

• Unless your contract says otherwise, progress payment claims can be made once a month.
• Claim on the date your contract sets. If it sets none, the date is the last day of the month.
• Only one claim can be made for each of those dates. If an earlier claim was not paid, you can include that amount in the next claim.
• Only work completed in the past 12 months can be claimed.
• For contracts signed from 21 October 2019, you can still make a claim after the contract is terminated, from the date of termination.

You can claim for the construction work you did, materials and plant you supplied, consulting services, interest on overdue progress payments, cash security and retention money, and the final payment at the end of the contract (sections 5 and 6).

What the payment claim must say

The NSW Government's page sets out how to make a claim (section 13). You must:

1. Make a written claim stating the amount due and describing the construction work, goods or services you are claiming for.
2. Serve it on the other side at the time your contract sets, or on or after each claim date, in person, by post or by fax, or any other way your contract allows.
3. Record the date the other side receives it.
4. If you are a subcontractor and the contract is connected with a residential construction contract, include the statement: 'This is a payment claim made under the Building and Construction Industry Security of Payment Act 1999 NSW'.

You can attach supporting documents: a statement of the work completed, completion certificates, delivery dockets, photos and anything else your contract asks for. They are not required, but they make a claim easier to check and harder to dispute.

Head contractors claiming from a principal must also give a supporting statement declaring they have paid all the subcontractors they engaged for the work (section 13(9)), on the approved form: one for construction contracts and one for owner occupier contracts. The NSW FAQ lists a maximum penalty of $22,000 for not giving a supporting statement, and $22,000 and/or three months' imprisonment for knowingly giving false or misleading information in one.

When you should be paid

Unless your contract sets an earlier date, the NSW Government's page gives these due dates after the claim is made (section 11). A contract can set an earlier due date, but not a later one.

If you are not paid by the due date, you can claim interest at the rate in the contract, if there is one, or at the rate set under the Uniform Civil Procedure Rules, whichever is greater. And a head contractor cannot make you wait until they are paid: the NSW FAQ says the Act prohibits 'pay when paid' clauses (section 34).

The payment schedule: the 10-business-day answer

If the other side does not intend to pay the whole claim, it must give you a payment schedule within 10 business days after receiving the claim, or sooner if the contract says so (section 14). The schedule must be in writing, identify the claim, state the amount it proposes to pay (which can be nil), and give all its reasons for paying less than you claimed.

If no payment schedule arrives in time, the NSW Government's page says the other side is liable for the full amount claimed, and if you go to adjudication or court it cannot raise a defence based on the contract or a cross-claim (section 15). It also cannot rely on reasons it left out of the schedule.

A worked example: a subcontractor claim, step by step

A tiling subcontractor on a commercial fit-out (so not residential work) has no claim date in the contract, so the claim date is the last day of the month. In October 2026 that is Saturday the 31st, so the claim goes in on the next business day, which is on or after the claim date. These dates are illustrative; count business days carefully, skip public holidays, and check whether your contract sets shorter times.

From there, three paths:

• A schedule arrives for less than claimed: the subcontractor can apply for adjudication within 10 business days of receiving it.
• A schedule arrives but the scheduled amount is not paid by 30 November: apply for adjudication within 20 business days after the due date.
• No schedule and no payment by 30 November: give notice of intention to apply for adjudication within 20 business days of the due date. The head contractor then has 5 business days to give a schedule, and the application must be made within 10 business days after that 5-day period. The subcontractor can also go to court for the full claimed amount.

If you are not paid: adjudication, suspension and court

Adjudication

Only the person making the claim can start adjudication (section 17). The NSW Government describes it as an independent, informal process to resolve a claim quickly and inexpensively. You choose an authorised nominating authority (ANA) from the list on the NSW Government's page; it passes your application to an adjudicator. The application must be in writing, lodged with the ANA within the time limit, served on the other side at the same time, and include the payment claim, any payment schedule, the contract and everything you want the adjudicator to consider.

Costs include the adjudicator's fees and expenses and the ANA's fees, and the two sides pay the adjudicator's fees equally unless the adjudicator decides otherwise (section 29). If the adjudicated amount is not paid, you can ask the ANA for an adjudication certificate and file it with the court, with a form and an affidavit, to get a judgment debt that is enforced like any court judgment (sections 24 and 25). A subcontractor may also be able to use the Contractors Debts Act 1997 to recover money from the principal; the NSW Government strongly recommends legal advice before you do.

Suspending work

If you are not paid by the due date, you can give a written notice of your intention to suspend work, stating that it is given under the Act, and suspend work two business days later (section 27). The other side cannot claim damages from you for the suspension. Once you are paid the whole amount due, you must resume within three business days.

Court

If no schedule was given in time and the claim is not paid, the NSW Government's page says you can go to court for the full claimed amount, immediately or within the next six years. Note that Building Commission NSW does not recover money for you; the Act gives you the tools, and you use them.

Two more rules for bigger contracts

• The Security of Payment Guide: the NSW Government's page says construction contracts worth more than $20,000 must contain its Security of Payment Guide, under clause 8 of the Home Building Regulation 2014, with fines for leaving it out.
• Retention money: a head contractor only has to keep retention money in a trust account if the contract is valued at $20 million or more.

Keeping it simple on your jobs

Paperwork that does not match the contract makes a claim easy to dispute: stage names that differ from the contract, variations rolled into a stage, or no record of when the claim went in. Use the same stage names as your contract, keep each approved variation on its own line, send claims in writing, and keep a record of when each one was received. Variations: how to price them and get them approved covers the written yes you need before the work.

TrackYaTradie sends each stage claim as an invoice with GST from the job, keeps approved variations on their own lines, and shows what has been paid and what is owing on every job. If your contract needs the statement line, add it to the invoice notes. For the Act itself, the deadlines and anything you are unsure about, the NSW Government's pages in the sources below are the place to check.