Security of Payment in NSW: payment claims and adjudication
New South Wales operates under the Building and Construction Industry Security of Payment Act 1999 (NSW), administered by Building Commission NSW. This page explains how to claim and recover progress payments and how the adjudication process works.
Security of Payment law in New South Wales gives the people who do construction work and supply related goods, head contractors, subcontractors, and suppliers, a statutory right to be paid and a fast way to resolve a payment that is disputed or unpaid. For owners and anyone higher up the contract chain, the same Building and Construction Industry Security of Payment Act 1999 (NSW) sets the timeframes you have to respond and pay within.
Here is how the scheme works in NSW, who it applies to, the timeframes that matter, and where to get help.
Key timeframes at a glance
- Payment schedule response
- 10 business days
- Payment due
- 15 business days for a head contractor, 20 business days for a subcontractor, and 10 business days for an exempt residential contract
- Apply for adjudication
- 10 business days after you receive the payment schedule
- Adjudication response
- 5 business days after receiving the application, or 2 business days after notice of the adjudicator's acceptance, whichever is later
- Adjudicator's decision
- 10 business days, unless both parties agree to longer
What the Act covers in NSW
New South Wales runs the east-coast Security of Payment model. It gives anyone who carries out construction work, or supplies related goods and services, a statutory right to claim and recover progress payments, with a fast adjudication process if a claim is disputed or unpaid.
The scheme is administered by Building Commission NSW. It runs alongside your contract, so you keep your contractual and common-law rights as well.
How to make a payment claim
A claimant serves a payment claim on the party who is liable to pay. The claim must identify the work or goods and services, state the amount claimed, and state that it is made under the Act. In NSW that endorsement is mandatory: leave it off and the claim does not enliven the scheme.
A claim can generally be served from the last day of the month in which the work was first carried out, and from the last day of each month after that.
Payment schedules and the response window
If the paying party disputes any of the claim, they must respond with a payment schedule within 10 business days, setting out the amount they propose to pay and the reasons for paying less.
If they do not provide a payment schedule and do not pay by the due date, they become liable for the full claimed amount, which the claimant can recover as a debt or pursue through adjudication.
When payment is due
A progress payment is due 15 business days after the claim for a head contractor, 20 business days for a subcontractor, and 10 business days for an exempt residential contract. A contract can set an earlier due date but not a later one.
Adjudication: a fast track for unpaid claims
If the scheduled amount is less than claimed, or a scheduled amount is not paid, the claimant can apply for adjudication, generally within 10 business days of receiving the payment schedule.
The respondent can lodge an adjudication response within 5 business days of receiving the application (or 2 business days after notice of the adjudicator's acceptance, whichever is later). The adjudicator then has 10 business days to decide, unless both parties agree to longer.
Recent changes
Amendments that commenced on 20 August 2024 added an express right to make a final payment claim after a contract is terminated.
Sources
Where to confirm the current rules
Adjudication in NSW is run through an authorised nominating authority (ANA), which appoints the adjudicator. The primary sources below are the place to confirm the current timeframes and wording.
BuildFair
How BuildFair fits alongside Security of Payment
Security of Payment is a recovery process you reach for after a payment has already gone wrong. BuildFair works earlier. Project funds sit outside the builder's operating account and are released against the agreed rules, so approved work has a clear path to payment in the first place. It does not replace your statutory rights under the Building and Construction Industry Security of Payment Act 1999 (NSW), it makes the disputes that trigger them far less likely.
Whichever side of the contract you are on, the same ringfenced funds and shared payment record work in your favour.
Builders
Fund jobs without bankrolling them
Run the project off ringfenced funds, so approved progress claims and subcontractor invoices have money behind them before a dispute ever starts.
For builders →Owners
See where your money sits
Your progress payments are released only against work you have approved, with a live record of every claim and payment on the job.
For owners →Subcontractors
Know the funds are there
Approved invoices are paid from money already set aside for the project, on a fixed clock, not whenever cashflow allows.
For subcontractors →Suppliers
Get paid from set-aside funds
Invoice through the project and be paid from funds ringfenced for the job, with a clean record behind every payment.
For suppliers →FAQ
Frequently asked questions
Does a payment claim in NSW have to state it is made under the Act?
Yes. Under the Building and Construction Industry Security of Payment Act 1999 (NSW), a payment claim must state that it is made under the Act. If that statement is missing, the claim does not enliven the scheme.
How long does the other party have to respond to a payment claim in NSW?
The respondent has 10 business days to give a payment schedule. If they do not respond in time and do not pay by the due date, they generally become liable for the full claimed amount.
When is a progress payment due in NSW?
A progress payment is due 15 business days for a head contractor, 20 business days for a subcontractor, and 10 business days for an exempt residential contract.
How long do I have to apply for adjudication in NSW?
The window is 10 business days after you receive the payment schedule. Always confirm the current wording and timeframes against the legislation and the administering body before acting. The figures below are stated in business days.