The new trust account framework commenced on 1 March 2021 to replace project bank accounts (PBA).
What is a trust account?
A trust describes the relationship which arises when a person (the trustee) holds property (in this case, progress payments and retention amounts) on behalf of and for the benefit of the party or parties that will become entitled to the amounts (the beneficiaries).
This arrangement operates through the use of a trust account. This account is separate to the trustee’s personal or business accounts. It keeps the project funds and retention amounts separate from funds of other projects and the contractor’s other cash flow.
The trust over the amounts held is established by the BIF Act (created by statute), making them statutory trusts. Statutory trusts differ from other types of trusts in that they do not require trust deeds and other documentation to establish the trust or to establish the beneficial interest in trust amounts.
To learn more about trust accounts, you can register for online webinars and retention trust training sessions at the QBCC’s events page.
An independent review of project bank accounts noted the framework was effective but recommended a number of improvements. As a result, changes to the BIF Act were made in 2020 to introduce the new trust account framework.
Transitioning project bank accounts
The period within which former PBAs were able to transition to the new trust account framework has ended. From 1 September 2021, a PBA can no longer transition and must continue to operate under the former PBA laws. This obligation continues until the former PBA is dissolved and closed at the end of the project.
Trustees who completed the transition of their PBA to the new trust account framework before 31 August 2021, must now comply with the trust account requirements of the new trust account framework.
For more information about operating project bank accounts, see: