Australia Security of Payment Acts
“Security of Payment” (SOP) legislation is the family of Australian state and territory statutes that protect construction-industry cash flow. The model began with the New South Wales Building and Construction Industry Security of Payment Act 1999 and now exists in every Australian jurisdiction. SOP is not federal law — each of the eight jurisdictions enacts and administers its own Act (in Western Australia and the Northern Territory the statute is styled the Construction Contracts Act), so payment-claim rules, timeframes and adjudication procedures differ across the country.
Australia Security of Payment Acts [part-of] Prompt Payment Legislation Australia Security of Payment Acts [regulates] Australia
The Acts share a common architecture. Any party that carries out construction work or supplies related goods and services has a statutory right to make a progress payment claim; the recipient must respond with a payment schedule and pay within mandated timeframes; and a dispute can be referred to fast statutory Construction Adjudication for an interim-binding decision (about 10–15 business days in NSW). Two anti-avoidance features are central: the Acts render Pay-When-Paid Clauses void, and parties cannot contract out of the legislation.
Australia Security of Payment Acts [opposes] Pay-When-Paid Clauses Australia Security of Payment Acts [relates] Construction Adjudication
The regime is still evolving in response to continued abuse. Western Australia replaced its earlier law with the Building and Construction Industry (Security of Payment) Act 2021, introducing streamlined adjudication and stronger subcontractor protections; the ACT amended its Act in March 2024; and Victoria’s 2023 parliamentary inquiry into non-payment of subcontractors foreshadowed further reform. The Acts are widely cited internationally — by Canada, South Africa and others — as the template for Prompt Payment Legislation.
Australia Security of Payment Acts [supports] Australia
Connections
- Australia — market the Acts govern, source: 2025
- Construction Adjudication — fast remedy created by the Acts, source: 2025
- Pay-When-Paid Clauses — voided by the Acts, source: 2025
- Prompt Payment Legislation — the Acts are the reference model, source: 2025