Major Overhaul of Victoria’s Security of Payment Laws Has Commenced
Victoria’s Security of Payment (SOP) framework has undergone a significant overhaul. From 15 April 2026, the Building and Construction Industry Security of Payment Act 2002 has been amended through the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025 (Fairer Payments Act) to strengthen payment protections across the construction industry.
These changes address a number of longstanding issues within Victoria’s SOP framework by expanding the range of contract costs that can be claimed, clarifying claim timeframes, and preventing respondents from introducing last-minute reasons for non-payment.
Key additions introduced through the Act include:
- Doubling the three months’ allowed for payment disputes to be resolved;
- Removing strict deadlines that unfairly stopped some claims from being considered;
- Enabling decision-makers to put a stop to enforcing notice-based time bars in contracts when their enforcement would be unfair;
- Allowing parties to construction contracts to make claims for the release of money withheld from them as security for their performance after their work has been completed;
- Giving the Building and Plumbing Commission (BPC) new responsibilities for educating building practitioners about their rights and obligations under the SOP Act;
- Making it easier to make claims or resolve disputes by allowing electronic service of documents; and
- Recognising that “business days” under the SOP Act don’t include the period when firms traditionally shut down for the festive season, from 22 December to 10 January.
The following two provisions under the Fairer Payments Act will have their commencement delayed due to implementation challenges:
- Section 25(4) – relates to Adjudicators Determination
- Section 45(3) – relates to Adjudicators fees or expenses.
These provisions are anticipated to commence on 1 September 2026, subject to review and possible amendment either before or after that date.
MEA has been actively engaged in consultations throughout the process and welcomes the Government’s proactive efforts to improve the SOP framework for subcontractors.
