On 11 April 2014 the NSW Government released the form of the
supporting statement which will be required to accompany all
payment claims made under the Building and Construction Industry
Security of Payment Act 1999 (NSW) (SOP Act).
Importantly, the template requires separate identification by
head contractors in a supporting statement of:
subcontractors paid all amounts due and payable; and
subcontractors for which an amount is in dispute and has not
Both the Amendment Act and Regulation will commence on
Monday, 21 April 2014. The amendments will only
apply to contracts entered into on or after 21 April
The other major changes that will come into effect on 21 April
Mandatory payment time-frames: Progress
payments must be made 15 business days after a payment claim is
submitted by a head contractor to a principal and 30 business days
for a claim submitted by a subcontractor to a head contractor. It
is essential that contract administrators put in place procedures
to comply with the new payment regime. The new time-frames will
apply even if your contracts provide for longer payment
No requirement to endorse payment claim under the SOP
Act: Payment claims in respect of contracts entered into
on or after 21 April 2014 do not have to be endorsed as being made
under the SOP Act for the provisions of the SOP Act to apply.
Therefore, any claim for payment, whether or not in the form
prescribed by the contract, could potentially be the subject of an
adjudication application under the SOP Act. This means that
principals and head contractors need to be attentive and respond to
all claims for payment in an appropriately comprehensive
Finally, we note that another key change foreshadowed in the
Amendment Act will not come into force on 21 April 2014. The
proposed requirement for trust accounts for retention money
withheld from subcontractors is the subject of industry
consultation and may still be some time away. Instead of using the
express regulatory power provided by the Amendment Act, the
Government is currently considering making a further amendment to
the SOP Act to introduce a trust account scheme for retention
A preliminary indication of the form that the scheme might take
is given by the
Consultation Paper released by the Government in November
For further information, construction industry participants may
wish to consult a set of Industry Fact Sheets published by the NSW
Department of Finance and Services on its
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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