On 15 April 2026, Victoria introduced a new security of payment regime that changes not only how construction disputes are resolved, but also how payment claims are made in the first place.
While much of the focus has been on adjudication and payment schedules, the amendments to the Building and Construction Industry Security of Payment Act 2002 (Vic) also reshape the way payment claims are prepared, structured, and served. For developers and contractors, these changes affect both the scope and timing of these claims.
Payment Claims Will Cover A Broader Range Of Entitlements
One of the most important changes removes the concept of “excluded amounts”, which historically limited what could be claimed under the Act.
Claimants can now include a broader range of entitlements in their payment claims. This is expected to capture items that have traditionally sat outside the regime, including:
- delay costs;
- latent condition claims; and
- certain variations
That change requires claimants to reconsider how they prepare payment claims. Because payment claims can now include those broader entitlements listed above, it will be important for claimants to ensure that all possible categories of claims are included in this document. For contractors, this creates an opportunity to recover a greater portion of project costs through the Act.
The Move Away From Reference Dates
The amendments remove the existing reference date framework and replace it with a more flexible monthly entitlement to claim.
Rather than relying on contractually defined reference dates, a claimant is entitled to serve a payment claim on or after the last day of each month in which work is carried out. Contracts may still provide for earlier claim dates, but the statutory position no longer depends on reference dates.
This simplifies the entitlement to claim. Claimants are generally still limited to one payment claim per month, which means they need to ensure each claim captures all relevant work and entitlements for that period.
Claims Will Survive Termination
Under the previous regime, the ability to make a payment claim could become uncertain where a contract had been terminated or had otherwise come to an end.
The amendments address that issue. A claimant’s right to serve a payment claim is no longer affected by termination, expiry, or purported termination of the contract.
This change ensures that parties can continue to pursue payment for work performed, even after the contractual relationship has broken down. Contractors can issue claims for outstanding entitlements following termination, rather than relying solely on contractual or common law remedies.
For principals, this reinforces the need to properly assess and respond to claims, even in a post-termination context.
Early Claims Will No Longer Be Invalid
The amendments also address the treatment of early payment claims. If a claimant serves a payment claim before the earliest permissible date, the claim will not be invalid. Instead, it will be treated as if it were served on the earliest date on which it could properly have been made.
This approach removes a technical trap that previously resulted in claims being challenged on timing grounds. However, it also requires parties to understand when a claim is taken to have been served, as that deemed date will determine when the time for responding begins to run.
The Definition Of “Business Day” Will Affect Claim Timing
The regime now pauses timelines over the Christmas period through a revised definition of “business day”, which excludes the period between 22 December and 10 January. This change alters how time is calculated across the payment process.
For example, a contract period of “20 business days” starting on 1 December would previously have expired in late December. Under the revised definition, that period will extend into January. Similarly, a payment claim relating to work performed up to 31 December may be served on or after 31 January, meaning a contractor who prepares its claim in early January will still fall within a valid claim window.
These changes will affect how parties calculate time for both payment claims and related obligations. A claim served in late December may not trigger the usual timeframes until mid-January, depending on how the excluded period applies.
While this recognises the industry shutdown period, it also introduces additional complexity. Parties will need to ensure their systems and processes accurately account for the revised definition to avoid miscalculating timeframes.
Payment Claims Will Carry Greater Weight In Disputes
As the scope of payment claims expands and adjudication becomes more prominent, the content of a payment claim takes on greater importance in any subsequent dispute.
A well-prepared claim will form the basis for an adjudication application, particularly where the respondent disputes all or part of the amount claimed. Conversely, a poorly prepared claim may create difficulties later, even where the underlying entitlement exists.
Claimants therefore need to approach payment claims with the same level of care typically reserved for formal dispute documents. This includes clearly identifying the basis of each component of the claim and ensuring that supporting material is readily available.
Claimants should also ensure that the payment claim is compliant with the Act – failure to do so may result in an invalid payment claim.
Preparing Your Contracts And Processes
The amendments require adjustments to both contracts and internal processes, and those changes should already be underway.
In preparing for the new regime, developers and contractors should:
- review contract templates to ensure they align with the new claim and timing framework;
- update internal billing processes to reflect a monthly claim cycle;
- ensure project teams understand the expanded scope of claimable entitlements; and
- implement systems to track claim timing, including deemed service and revised business day calculations.
These reforms are intended to improve cash flow and strengthen payment across the industry, while also increasing the focus on how payment claims are prepared and presented. Parties that review their current practices and make targeted adjustments will be better placed to navigate the changes and reduce the risk of disputes.
If you would like assistance reviewing your contracts, refining your processes, or preparing payment claims under the new regime, feel free to get in touch.
