Under current legislation, Queensland project trust account and retention trust account requirements will be extended:
- from 1 March 2025, to eligible contracts over $3 million, including contracts in the private sector;
- from 1 October 2025, to eligible contracts over $1 million, including contracts in the private sector.
This is a major expansion of the application of statutory trusts and will impose significant obligations on a broad range of construction industry participants.
The requirements currently apply to eligible Queensland Government and hospital and health service contracts of $1 million or more, and private sector, local government, statutory authority, and government-owned corporation contracts of $10 million or more.
For eligible contracts, a project trust account must be opened and operated by the contractor, and project payments must be managed as required by the legislation. Where a project trust account is required, a retention trust account must be opened and operated for any retention money. There are substantial penalties for non-compliance. The legislation was recently amended in response to industry feedback, to reduce the complexity and cost of complying with the framework, as set out here – New Changes to Queensland Statutory Trust Framework.
The statutory trust regime has been rolled out in various phases. The phases which are scheduled to commence in 2025 are the 3rd and 4th (final) phases. The commencement of phases 3 and 4 was previously deferred due to an assessment of industry readiness and capability, lack of availability of software to assist compliance, and market factors. As at the date of publication of this note, there is no published deferment of the commencement of phases 3 and 4.
Consequently, contractors should prepare for the commencement of phase 3 by assessing which contracts the requirements apply to, and ensuring they have processes in place to ensure compliance.
If you require assistance with statutory trust compliance, please get in touch.
