Upcoming changes to trust account laws
Trust account laws are expanding from 1 January 2022 to include private sector contracting parties with eligible construction contracts with a value of $10 million or more.
New requirements for principals
These new requirements mean that if you are a principal or developer you may require a retention trust account for cash retentions withheld for eligible private sector projects valued at $10 million or more.
Anyone required to open a retention trust account will need to complete training on how to operate a trust account within the 4 weeks (20 business days) after withholding the first eligible retention amount (that is, cash retention amounts required to be held in a retention trust).
New requirements for head contractors
The trust account requirements are expanding to eligible private sector, local government or state authority construction projects valued at $10 million or more. If you are entering into a contract for this work, you may be required to have a project trust account. The trust account requirements already apply to State Government and Hospital and Health Service projects valued at $1 million or more.
If you are withholding cash retention amounts from subcontractors for these projects, a retention trust may also be required. Anyone required to open a retention trust account will need to complete training on how to operate a trust account within the 4 weeks (20 business days) after withholding the first eligible retention amounts (that is, cash retention amounts required to be held in a retention trust).
Payments for and by subcontractors
If you are directly engaged by the head contractor and working on an eligible project, you will be paid from a trust account. Any cash retention amounts withheld for these projects must be held for you in the head contractor’s retention trust account until payable to you.
From 1 October 2023, you may need a retention trust account as well if you further subcontract out work and withhold eligible cash retention amounts. Read more about the trust account rollout.
Not sure whether you need a project or retention trust account?
Trust accounts are required in certain circumstances. There are different criteria determining when project trusts and retention trusts are required.
Use the trust account tool to help you quickly and easily determine if your contract is eligible and requires a project trust account or if the cash retentions you’re withholding need to be kept in a retention trust account.
To learn more about trust accounts, you can register for online webinars and retention trust training sessions at the QBCC’s events page.
The trust account section of our website provides more details about the requirements for all parties and provides updated information about the new dates for the staged rollout.