Vic Claimant Prepares Payment Claim

PLEASE NOTE: The information below is in relation to payment claims. If you are preparing a performance security claim in respect of a progress payment, please click here.

A person who, under a construction contract, has undertaken to carry out construction work or to supply related goods and services is entitled to receive a progress payment for work performed.

Claimant Prepares Payment Claim

A payment claim is a claim (invoice) which may allow recovery of money pursuant to the Building and Construction Industry Security of Payment Act 2002 (Vic). A payment claim may be served alone or in conjunction with a performance security claim.

The easiest way to prepare and submit a payment claim is by using Lockbox. Alternatively download a PDF template of a Claim.

A valid payment claim must comply with the below requirements

A payment claim must:

1. be served by or on behalf of a claimant (in accordance with strict legal requirements as to service); and
2. identify the construction work or related goods and services to which the progress payment relates – describe matters including the items and quantities of work done or related goods and services provided; and
3. indicate the amount due (remember to indicate GST, if applicable); and
4. contain the words: “This is a payment claim made under the Building and Construction Industry Security of Payment Act 2002 (Vic)”; and
5. be addressed to the correct legal entity (not the trading name) or individual that the claimant contracted with (the respondent), including correct ABN/ACN details.

Earliest date a Payment Claim may be served (see s 14A of the Act):

A Payment Claim may be served on and from:

• the last day of the named month in which the construction work was first carried out or goods and services provided;
• the last day of each subsequent named month during which work is carried out or goods and services provided;
• an earlier date if provided for in the construction contract;
• if a notice of termination is served or a construction contract is terminated by agreement, a claim may be served on and from the date of termination;
• special rules relate to the month of December. If a payment claim relates to:
1. the period starting on 1 December and ending on 21 December, the payment claim may be served on and from 22 December of that year; or
2. the period starting on 22 December and ending on 31 December, the payment claim may be served on and from 31 January in the following year.

Only one payment claim can be made for each month. However, a payment claim which was previously submitted and not paid in whole or part, can be incorporated as part of a new payment claim in respect of a later month.

IMPORTANT: If the claimant serves a payment claim before the earliest day a payment claim may be served:

• the payment claim is not invalid;
• the payment claim is taken to be served on the earliest day; and
• the time within which the respondent may serve a payment schedule on the claimant does not commence until the earliest day.

Latest date a Payment Claim can be served (see s 14C of the Act):

A Payment Claim may be served no later than the day before the latest of:

• the date specified in the construction contract;
• the date that is 6 months after the practical completion of all construction work to be carried out under the construction contract;
• the date that is 6 months after the supply of all related goods and services to be supplied under the construction contract.

What can I claim in a payment claim?

A payment claim may include construction work and/or related goods and services including:

1. the final payment under the construction contract; or
2. a single or one-off payment under the construction contract; or
3. a payment based on an event or date (“milestone payment”).

This does not prevent the claimant making one payment claim for a progress payment in any particular month (unless the contract makes provision for an earlier date).

Unless additional work has been undertaken, payment claims (or parts of payment claims), which are the subject of an earlier adjudication determination can't be resubmitted in a subsequent payment claim.

That is, exactly the same work can’t be submitted to a second adjudication if the claimant is not satisfied with the first result. Where there is an overlap of work (some previously adjudicated and some new), the second adjudicator must give the previously adjudicated work the same value as the first adjudicator.

Next steps

A payment schedule is the respondent’s reply to the payment claim.

Different procedures and timeframes apply depending on when the payment schedule is served:

1. if the respondent serves a valid payment schedule within 10 business days, visit Respondent Serves Schedule.
2. if the respondent does not serve valid payment schedule within 10 business days, visit Respondent DOES NOT Serve Schedule.

Avoid pitfalls

Click here for a list of common reasons why claimants do not succeed in adjudication.

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