Security of Payment Legislation: What’s Changing and How Subcontractors Can Improve Debt Recovery
Understanding the Security of Payment Act
The Building and Construction Industry Security of Payment Act 2002 (Vic) remains one of the most powerful tools available to subcontractors seeking to preserve cash flow.
Recent legislative reforms will strengthened enforcement. The new Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025 received royal assent in November 2025 and this means Victoria will be more aligned with other Australian jurisdictions.
What the 2025 Reforms Mean for You
Builders, plumbers, engineers and all subcontractors need to have a lawyer as a “go to” to assist when payment is not received. You need to be ready to issue a payment claim and payment schedule and more importantly these new changes mean subcontractors working across states of Australia will be benefitted by some similarity between jurisdictions.
Timeframes remain unforgiving and non-compliant payment schedules can expose parties but used right these changes provide contractors with greater ability to get paid. They should reduce some of the complexity around reference dates (which are removed) and the types of claims that can be pursued by removing the concept of excluded amounts. Meaning disputed variations can be pursued.
Subcontractors can improve recovery prospects!
Maximising Your Recovery Through Adjudication
Builders and principals need to also understand the effect of this new law including the importance of getting payment schedules right the first time. The new law will not allow respondent to raise new reasons for withholding payment in a response to an adjudicator that was not in the payment schedule.
Where appropriate, adjudication can be combined with conventional recovery proceedings or statutory demands under the Corporations Act 2001 (Cth) to maximise leverage – talk to us about how.
Get Fast, Targeted Advice from BU Lawyers
Our initial consultation which can often be arranged within 24 hours is a great opportunity to get fast and targeted advice for your payment claim or schedule.
BU Lawyers are taking briefs to prepare adjudication applications in the Victorian adjudication process. Ask us how!
This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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