The Building and Construction Industry (Security of Payment) Act 2021 (the Act) helps protect contractors in the construction industry from the risks of not being paid.
Despite the protections provided by the Act, there may be times when contractors need to make a payment claim.
Below is an overview of the process to follow, under the Act, to make a payment claim.
Understanding your rights
Under the Building and Construction Industry (Security of Payment) Act 2021, contractors have statutory rights to receive progress payments for work done or goods and services supplied under a construction contract.
The Act applies to contracts entered on or after 1 August 2022. Key points of the Act include:
- Payment claims can be made monthly or at intervals specified in the contract.
- Payment claims must be in writing, indicate the amount claimed, describe the work done, and state that the claim is made under the Act.
- Respondents must provide a payment schedule within 15 business days or the circumstances of dispute, if they wish to dispute the claim.
Find out more about how WA’s Security of Payment Act helps subcontractors get paid.
Making a payment claim
Step 1: Prepare your payment claim
Ensure your payment claim is in writing. You can either download and use the payment claim template published by the WA Building Commission or prepare your own written claim.
If you are writing your own claim, it will need to include the following:
- A statement that your claim is being made under the Building and Construction Industry (Security of Payment) Act 2021. To do this, simply write the following on the payment claim: This is a payment claim made under the Building and Construction Industry (Security of Payment) Act 2021.
- The amount claimed.
- A description of the work done, or goods/services supplied.
You must submit your payment claim within six months of completing the work or supplying the goods/services, unless the contract specifies a longer period.
Step 2: Serve the payment claim
- Serve the payment claim to the respondent (the party who owes you payment) as specified in the contract.
- Keep a record of the time, date, and method of service, as this will be important if there is a dispute.
Step 3: Await a payment schedule
- The respondent must provide a payment schedule within 15 business days of receiving your payment claim, or within any shorter period specified in the contract.
- The payment schedule should indicate the amount the respondent proposes to pay and, if this amount is less than the claimed amount, reasons for withholding payment.
Step 4: Apply for adjudication
An application for adjudication can only begin after the specified time frame of 15 business days from serving the payment claim. You can apply for adjudication if:
- You do not receive a payment schedule after 15 business days.
- You are in dispute and 15 business days have lapsed.
- The respondent fails to pay the scheduled amount.
- The scheduled amount is less than the claimed amount.
Submit your application to an appointed adjudicator. The adjudicator will review the case and make a determination within a short timeframe. There are adjudication fees to consider. Generally, these are split equally between the claimant and the respondent.
Visit the Building and Energy website for more information on applying for adjudication.
Free guides and templates to help you
Building and Energy have published a payment claim template and adjudication application template to help business owners. The forms are not mandatory but contain the minimum statutory information required for forms of this type.
Adjudicate Today has an interactive flowchart that can help you track the process and show possible options available to claimants and respondents at each step.
If you need more assistance on the Act
For further assistance or clarification, you can contact Building and Energy on 1300 489 099 or be.info@demirs.wa.gov.au.
