If you do construction work or supply related goods and services, understanding how to request payment is really important.
By following the information below, you can take control of payments owing to you and put yourself in the best position possible should your claim be disputed or you don’t get paid.
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 owes 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 will 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 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, or if your contract does not state a reference date, it is the last day of the month the work was carried out or the goods and services were delivered.
A contract may include one reference date for one-off payments or multiple reference dates where payments can be claimed weekly, fortnightly, monthly or at other agreed timeframes. The contract may also state a reference date for making a final payment claim or claiming retentions 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 work carried out up to the reference date as well as outstanding payments from previous payment claims.
Be sure to stick to the reference dates in your contract. A payment claim submitted before a reference date may be considered invalid and limit your access to certain payment dispute resolutions options, such as adjudication.
Working out your reference dates
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.
The BIF Act sets out the following default reference dates:
- progress payments (one-off or multiple payments) – is the last day of the month in which work was carried out or related goods or services were supplied. For future payment claims, the default reference day is the last day of each following month
- final payment claims can be given before the end of the period stating in the contract, or six months after the completion of all the work or supply of all the goods or services under the construction contract
- claims for retention payments may be given up to 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 constructions 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.
Special note: 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 ‘paid when paid’ provisions – are void under the BIF Act, meaning they have no effect.