Security of Payment Act
Posted on July 11, 2025
Having difficulty getting paid? Here is a solution…
With the half way point of 2025 now passed, it is a good opportunity to remind the construction industry about the benefits of the Building and Construction Industry Security of Payment Act 2009 (SA) (SOPA Act).
A primary objective and goal of the SOPA Act is to provide a way for those in the construction industry to be paid quicker and in a more efficient way. It is particularly useful for sub-contractors seeking payment from builders.
Under the SOPA Act, a person who has provided goods and services under a ‘construction contract’ (this has a special and pretty broad meaning) is entitled to issue a ‘payment claim’ (also has a special meaning) for the goods and services provided.
There are strict requirements for a payment claim to be compliant, namely it must:
- identify the construction work (or related goods and services) to which the claim relates; and
- indicate the amount claimed (Claimed Amount); and
- must say that it is made under the SOPA Act.
With the above requirements in mind, payment claims are typically a relatively detailed tax invoice which includes the words “This is a payment claim under the Building and Construction Industry Security of Payment Act 2009 (SA)”.
Once a payment claim has been issued, the recipient of the payment claim must provide a ‘payment schedule’ to the claimant either within the time required under the construction contract or within 15 days after the payment claim is served, whichever is earlier. A ‘payment schedule’ must:
- identify the payment claim to which the payment schedule relates; and
- indicate the amount of the claimed amount (if any) the responding person proposes to pay (Scheduled Amount).
If the Scheduled Amount is less than the Claimed Amount, the responding person must provide reasons for short paying.
If a valid payment schedule is issued, and the responding party disputes the Claimed Amount and / or fails to make payment of any amount it agreed to pay, the claimant can file an ‘adjudication application’ for the matter to be decided by way of an adjudication.
An adjudication is a time and cost-effective process in which an adjudicator (an independent third-party decision maker) considers the materials and submissions by the parties and decides what amounts are to be paid (if any).
If a responding party fails to issue a valid payment schedule on time, the claimant can file a claim in court seeking judgment for the Claimed Amount and the responding party is prevented from defending that claim or issuing a claim of their own (e.g., it cannot say it is not liable to pay because the goods or services provided were defective). This is a far more efficient way of enforcing payment compared to your traditional debt court claim often utilised by sub-contractors.
There are strict requirements under the SOPA Act regarding the method and timing of service, the contents of payment claims and payment schedules, and whether a party is entitled to issue a payment claim.
We therefore recommend you get into contact with us so we can provide you with specific advice on the SOPA Act and how it can best be used.
This article is general in nature, is based on the law as at the date of publication and is not intended to provide legal advice to your specific situation. If you have an issue or particular payment claim issue that you would like to discuss, please give us a call and we can provide legal advice to suit your needs. Lynch Meyer’s Construction, Infrastructure and Engineering Team frequently deal with all enquiries in relation to Security of Payment laws, including payment claims, payment schedules and adjudications.
