Subcontractors and suppliers in construction have stronger payment rights than most realise — and since 15 April 2026, those rights are significantly broader than they were.
The Building and Construction Industry Security of Payment Act 2002 (Vic) exists because the construction industry has a payment problem. Head contractors delay payments, dispute amounts, or simply don't pay. The Act provides a faster, less expensive path to getting paid for work actually done — without the cost and delay of litigation.
On 15 April 2026, the most significant reforms to this Act in two decades took effect. If you are a subcontractor, supplier, or contractor owed money for construction work in Victoria, the rules have changed in your favour.
Owed money for construction work in Victoria? The April 2026 reforms significantly expanded your payment rights. Get advice before the timeframe closes.
Book a Free Consultation →The Three-Step Process
Step 1 — Serve a payment claim
A payment claim is a formal document served on the person who owes you money for construction work, goods, or services. It must specify the work done, the amount claimed, and state that it is made under the Act. Since the April 2026 reforms, you have up to 6 months after practical completion to serve a payment claim — extended from the previous 3-month limit. This means claims that might have expired before 15 April 2026 may now be available again.
Step 2 — The respondent provides a payment schedule (or doesn't)
The respondent has 10 business days to serve a payment schedule — a formal response that either agrees with the claimed amount or sets out the amount they believe is due and why. If no payment schedule is served within 10 business days, the full claimed amount becomes due immediately — and can be recovered in court as a debt without a hearing on the merits.
Since the April 2026 reforms, respondents can no longer raise new reasons for withholding payment in an adjudication response that were not included in their payment schedule. This is a significant change — it means the payment schedule must be complete, because what isn't in it can't be relied on later.
Step 3 — Adjudication
If the respondent serves a payment schedule that disputes the amount, the claimant can apply for adjudication. An independent adjudicator is appointed by an Authorised Nominating Authority. The adjudicator must make a determination within 10 business days of accepting the application. The determination is binding and enforceable as a court judgment.
What Changed on 15 April 2026
The Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025 delivered the most substantial overhaul of Victoria's security of payment regime in two decades. The key reforms:
- Payment claim window extended from 3 to 6 months after practical completion — giving subcontractors significantly more time to prepare and serve claims
- Excluded amounts regime abolished — Victoria was the only state that prevented certain claims (including variations, damages, and delay costs) from being adjudicated. That restriction is gone. All contractual claims can now proceed to adjudication.
- Payment terms capped at 20 business days — any contract clause requiring payment beyond 20 business days is void
- No new reasons in adjudication — respondents can only rely on the reasons set out in their payment schedule. This prevents ambush defences in adjudication.
- Notice-based time bars reviewable — contract clauses that make claims conditional on notice within strict timeframes can now be declared unfair and unenforceable by an adjudicator or court
- Christmas shutdown excluded from business days — the period between 22 December and 10 January is excluded from the definition of "business day"
The reforms apply retrospectively to existing contracts — not just new ones. Payment claims served on or after 15 April 2026 benefit from the new rules.
The Catch: Strict Timeframes
The rights are there. But they are time-limited. Miss the window for serving a payment claim, fail to respond correctly to a payment schedule, or let the adjudication period lapse — and the right is gone for that payment period. There is no extension.
The people who know the process get paid faster than the ones who wait and hope.
How Phan Campbell & Associates Can Help
At Phan Campbell & Associates in Footscray, our construction litigation team acts for subcontractors, suppliers, and head contractors across Melbourne and Victoria on security of payment claims.
We prepare payment claims, respond to payment schedules, and represent clients in adjudication proceedings. Because we are a combined legal and accounting firm, we can also advise on the tax and GST implications of progress payments and retention amounts. If you are owed money for construction work, get advice before the window closes.
Frequently Asked Questions
1. What is a payment claim under the SOP Act?
A payment claim is a formal document served on the person who owes you money for construction work, goods or services. It must specify the work done, the amount claimed, and state that it is made under the Building and Construction Industry Security of Payment Act 2002.
2. How long do I have to make a payment claim in Victoria?
Since the April 2026 reforms, you have up to 6 months after practical completion or the supply of all goods and services to serve a payment claim. This was extended from the previous 3-month limit.
3. What happens if the other party doesn't respond to my payment claim?
If the respondent does not serve a payment schedule within 10 business days, the full claimed amount becomes due immediately and can be recovered in court as a debt — without a hearing on the merits.
4. What changed in the April 2026 security of payment reforms?
Major reforms took effect on 15 April 2026: the payment claim window extended from 3 to 6 months, the excluded amounts regime was abolished (meaning variations and damages can now be claimed), payment terms are capped at 20 business days, and respondents can no longer raise new reasons in adjudication that weren't in their payment schedule. If you are owed money, book a free consultation with Phan Campbell & Associates.