Security of Payment in Queensland: Your Rights Under BIFA 2023

Getting paid for construction work in Queensland should not be a battle. But too often, subcontractors, builders, and suppliers find themselves chasing payments for months while cash flow dries up and the next project hangs in the balance.

The Queensland Government’s security of payment legislation exists precisely to address this problem. At Boss Lawyers, we regularly act for contractors, subcontractors, and principals in payment disputes across the building and construction industry.

What Is Security of Payment?

Security of payment refers to a statutory framework designed to ensure that people who carry out construction work or supply related goods and services are paid promptly.

In Queensland, this framework is governed by the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (the BIFA). The BIFA replaced the earlier Building and Construction Industry Payments Act 2004 and was significantly amended in 2023 to strengthen protections for those in the construction supply chain.

The Act provides a rapid adjudication process that allows parties to resolve payment disputes without the delay and expense of court proceedings — while work continues on site.

Who Does the BIFA Protect?

The BIFA applies to any person who has carried out construction work or supplied related goods and services under a construction contract in Queensland.

This includes:

• Subcontractors — the primary beneficiaries of the legislation
• Head contractors — when claiming against principals or developers
• Suppliers — of materials, plant, and equipment used in construction
• Consultants — architects, engineers, surveyors, and other professionals providing services related to construction

The Act applies to both commercial and residential construction work, with some exceptions for domestic building work performed directly by a homeowner.

How Payment Claims Work

The payment claim is the foundation of the security of payment process. Getting it right is essential.

What Must a Payment Claim Include?

Under section 68 of the BIFA, a valid payment claim must:

1. Be in writing
2. Identify the construction work or related goods and services to which the claim relates
3. State the amount claimed (the claimed amount)
4. State that it is made under the BIFA
5. Be served on the person who, under the contract, is liable to make the payment (the respondent)

Critical point: The claim must explicitly state it is made under the BIFA. A standard invoice that does not reference the Act may not qualify as a valid payment claim — and you may lose your right to adjudication.

When Must a Payment Claim Be Served?

A payment claim may be served on and from the reference date under the contract. If the contract does not specify reference dates, the BIFA provides default reference dates — generally the last day of each month in which work is carried out.

Payment claims must be served within 12 months after the construction work was last carried out (or the related goods and services were last supplied).

Payment Schedules: The Respondent’s Obligations

Once a payment claim is served, the respondent must provide a payment schedule within 15 business days after the claim is served (or a shorter period if specified in the contract, but not less than 10 business days).

A payment schedule must:

• Identify the payment claim to which it relates
• State the amount the respondent proposes to pay (the scheduled amount)
• If the scheduled amount is less than the claimed amount — state why and provide reasons for withholding payment

What If No Payment Schedule Is Provided?

If the respondent fails to provide a payment schedule within the required timeframe, the consequences are severe:

• The respondent becomes liable to pay the full claimed amount by the due date
• The claimant can recover the amount as a debt in court — and the respondent cannot raise any defence or cross-claim in those proceedings
• The claimant can also proceed to adjudication, where the adjudicator must determine the matter based only on the claimant’s submissions

This is one of the most powerful aspects of the legislation. Failing to respond to a payment claim effectively concedes the full amount.

The Adjudication Process

If the respondent provides a payment schedule but disputes the claimed amount (or pays less than the scheduled amount), the claimant can apply for adjudication.

Step 1: Apply to an Authorised Nominating Authority (ANA)

The claimant must lodge an adjudication application with an ANA within 30 business days after the respondent provides the payment schedule (or fails to pay the scheduled amount).

The application must include the payment claim, the payment schedule (if any), the construction contract, and submissions supporting the claimed amount.

Step 2: Adjudicator Appointment

The ANA refers the application to a registered adjudicator, who must be independent of both parties.

Step 3: Respondent’s Reply

The respondent has 15 business days after receiving a copy of the application (or 5 business days for complex construction management trade contracts) to lodge an adjudication response. The response is limited to the reasons already included in the payment schedule — the respondent generally cannot raise new reasons for withholding payment.

Step 4: Adjudicator’s Decision

The adjudicator must decide the application within 15 business days after the response deadline (this can be extended by agreement). The decision is binding on an interim basis — meaning the respondent must pay the adjudicated amount even if they intend to dispute it later in court or arbitration.

The 2023 Amendments: What Changed

The 2023 amendments to the BIFA introduced several significant changes that strengthened protections for claimants:

• Expanded scope: The definition of “construction work” was broadened to capture a wider range of activities
• Improved trust account provisions: Enhanced requirements for retention money trust accounts to protect subcontractor funds
• Stronger compliance framework: Increased penalties for non-compliance and improved enforcement mechanisms
• Simplified processes: Streamlined adjudication procedures to reduce costs and delays
• Better protections against unfair contract terms: Provisions addressing “pay when paid” and “pay if paid” clauses, which are void under the Act

Practical Tips for Subcontractors

1. Always reference the BIFA in your payment claims. A standard invoice is not enough.
2. Serve claims correctly — by the method specified in the contract or by the method permitted under the Act.
3. Keep detailed records of all work performed, variations, and communications. These are critical if you need to adjudicate.
4. Act within the timeframes. Missing a deadline — even by one day — can extinguish your rights under the Act.
5. Do not accept “pay when paid” clauses. These are void under the BIFA. You are entitled to be paid for your work regardless of whether the head contractor has been paid by the principal.

Practical Tips for Head Contractors and Principals

1. Respond to every payment claim with a payment schedule — within the required timeframe. Failure to respond is the single biggest mistake we see.
2. Be specific in your reasons for withholding payment. Vague reasons like “disputed” or “under review” are insufficient and may not be accepted by an adjudicator.
3. Understand your trust account obligations. The BIFA imposes strict requirements for holding retention money in trust — non-compliance carries significant penalties.
4. Seek legal advice early. The adjudication process moves fast, and the consequences of getting it wrong are serious.

When to Go Beyond Adjudication

Adjudication provides an interim determination — it is not a final resolution. If the amount in dispute is significant or involves complex legal or factual issues, you may need to pursue the matter through court proceedings or arbitration for a final determination.

Common situations where court proceedings may be necessary include:

• Challenging an adjudication decision on jurisdictional grounds
• Pursuing damages for building defects or incomplete work
• Enforcing an adjudication decision that has not been paid
• Recovering amounts beyond the scope of the adjudication

How Boss Lawyers Can Help

Whether you are a subcontractor chasing payment or a head contractor responding to a claim, the security of payment process demands precision and speed. The timeframes are strict, the procedural requirements are technical, and the consequences of errors are costly.

At Boss Lawyers, we have extensive experience in building and construction disputes, including security of payment claims, debt recovery, and QBCC matters. We act for subcontractors, head contractors, principals, and developers across Queensland.

If you have a payment dispute, do not wait. The deadlines under the BIFA are unforgiving, and early legal advice can make the difference between getting paid and missing your window.

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This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances. Boss Lawyers Pty Ltd | ACN 143 136 645 | Level 27, Santos Place, 32 Turbot Street, Brisbane QLD 4000