Security of Payment Claims
Security of payment laws give those in the construction industry a fast, statutory route to recover progress payments — quite different from an ordinary debt claim.
What you'll learn
- Understand the purpose of security of payment laws
- See who and what these regimes generally cover
- Recognise the strict, time-driven nature of the process
- Appreciate why the rules differ across jurisdictions
7 min read
What these laws are for
Security of payment legislation exists to keep cash flowing in the building and construction industry. The core idea is that those who carry out construction work, or supply related goods and services, should be paid promptly for progress claims, with a rapid adjudication process to resolve payment disputes. It is designed to be quicker and cheaper than ordinary litigation, so contractors and subcontractors are not starved of cash while disputes drag on.
Who and what is covered
These regimes generally apply to construction contracts and to construction work and related goods and services, as defined by the relevant legislation. There are usually exclusions and special cases, and the precise coverage — including the types of contract and work caught — varies by state and territory. If your work falls within a security of payment scheme, it can offer a powerful alternative to chasing payment through the courts.
Strict timing
Security of payment processes are built around strict deadlines: for serving payment claims, for responding with payment schedules, and for applying for adjudication. Missing a deadline can have serious consequences — including losing the right to dispute an amount, or losing access to the fast-track process altogether. The trade-off for speed is rigidity, so close attention to dates and forms is essential at every step.
A note on advice
This is general information only and not legal advice. Security of payment regimes differ significantly between Australian jurisdictions, are highly procedural, and change over time. If you are issuing or responding to a payment claim, seek advice promptly so deadlines are not missed. For debts outside these schemes, you can refer a debt to Merion for commission-only recovery.
Key takeaways
- Security of payment laws help the construction sector get paid quickly.
- They generally cover construction contracts and related work.
- The process is fast but governed by strict deadlines.
- Rules vary considerably by state and territory.
Frequently asked questions
Who can use security of payment laws?
Generally those performing construction work or supplying related goods and services under a construction contract, as defined locally. This is general information, not legal advice.
What happens if I miss a deadline?
Missing a statutory deadline can forfeit rights, such as the ability to dispute an amount or use the fast-track process. Act promptly.
Do these laws apply outside construction?
Generally no; they are specific to construction work and related supplies. Other debts use ordinary recovery routes.
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