How to make a payment claim under the NSW SOP Act.

The four numbers that run a NSW claim

Everything under the NSW Act runs on business days — which exclude weekends, public holidays and 22 December to 10 January inclusive, so the statutory clocks pause over the Christmas shutdown. Four numbers do most of the work:

What the SOP Act actually does

Every Australian state and territory has a Security of Payment Act, and they all exist for one reason: to keep money moving down the contracting chain. The legislation sits on top of your contract. It gives anyone carrying out construction work a statutory right to progress payments and a quick, low-cost process called adjudication to recover them, without waiting years for a court. The Acts prohibit contracting out — so whatever your subcontract says, the head contractor cannot sign those rights away on your behalf.

The Act that applies is the Act of the state where the construction work is carried out. Not where your company is registered, not where the builder's head office is, and not what the contract nominates. Work on a Parramatta site and the NSW Act governs your payment claim even if you are a Melbourne business. Working over the border? See the guides to payment claims in Victoria and payment claims in Queensland, or the state-by-state guide to Security of Payment.

One thing is uniform across the country: pay-when-paid is void. A clause making the builder's obligation to pay you conditional on the builder first being paid by the principal is unenforceable under every Security of Payment Act, NSW included.

Who can make a payment claim, and when

Broadly: anyone who has carried out construction work, or supplied related goods and services, under a construction contract for a project in New South Wales. That covers subcontractors and sub-subcontractors, suppliers of plant and materials tied to the work, and consultants providing related services — and the contract does not have to be a formal signed document. Recent amendments extended the Act to owner-occupier construction contracts too, so residential work is no longer the gap it used to be.

When you can claim

On and from the last day of each calendar month in which you carried out work — or an earlier date in the month if your contract provides one. Your contract can give you more frequent claim rights; what it cannot do is take the monthly entitlement away. You can also serve a claim when the contract is terminated.

The long-stop. A payment claim can be served within the period your contract allows or 12 months after the work it relates to was last carried out, whichever is later. Twelve months sounds generous until a defects argument drags on — the subcontractor who claims every month never has to test it.

What goes in a valid payment claim

A payment claim is not the same document as your usual invoice, although it can be built on one. Get the basics wrong and the claim can be worthless no matter how good the underlying entitlement is. At minimum, a payment claim identifies:

• The construction work it relates to — enough detail that the respondent can tell what they are being asked to pay for.
• The amount claimed, built up so it can be checked: contract works, variations, materials, retention released, GST.
• The claim period it is made for.
• Who it is served on and how — the person named in the contract, by personal delivery, post, email or an agreed electronic portal, with a record that proves it arrived.

The endorsement is mandatory in NSW

Your payment claim must state on its face that it is made under the Act (s 13(2)(c)), using words to this effect:

This is a payment claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW).

The trap is the wording, not the presence of it. A template borrowed from a Melbourne job will carry an endorsement, but it will endorse the Victorian Act — and that does not satisfy s 13(2)(c) on a Sydney project. Check the Act named in the line, not just that a line is there.

One requirement you can ignore as a subcontractor: the supporting statement. A head contractor serving a payment claim on the principal must attach a supporting statement declaring its subcontractors have been paid (s 13(7)). A subcontractor claiming from a head contractor does not — that obligation runs up the chain, not down it.

After you serve the payment claim

The payment schedule

The respondent replies with a payment schedule: the amount they propose to pay and, where that is less than you claimed, the reasons why. It is due within the time your contract requires or 10 business days after you served the claim, whichever comes first — the contract may shorten that window, never lengthen it. Read it the day it lands, because a schedule that comes back short starts the adjudication clock immediately.

Payment itself falls due no later than 20 business days after the claim is served on a subcontract, and 15 business days on a head contract. For subcontract work connected with a residence the owner lives in, the due date is 10 business days.

If no payment schedule arrives

Silence costs the respondent. If they do not serve a payment schedule in time, they become liable for the full amount you claimed on the due date. From there you have two routes:

• Recover it as a debt in court (s 15). This is the quick one — judgment for the unpaid amount, and in that proceeding the respondent cannot raise a defence or a cross-claim arising under the contract. They have to pay first and argue later.
• Give notice of intention to apply for adjudication (s 17(2)). You have 20 business days after the due date to give it, and it hands the respondent a 5 business day second chance to put in a payment schedule. Once that 5-day window closes, you have 10 business days to lodge the adjudication application.

The debt route is usually the stronger play when the respondent has simply ignored you. It is also the reason serving a proper payment claim every month, as routine rather than only when the relationship sours, is worth the ten minutes it takes.

Adjudication

Adjudication is a documents-only determination by an independent adjudicator. It decides who holds the money while any wider dispute continues, not who is ultimately right, and the determination is enforceable in the meantime. The timetable:

• Applying. Where the payment schedule offers less than you claimed, you have 10 business days from receiving it. Where the scheduled amount simply was not paid, you have 20 business days from the due date. Where no schedule was served at all, the s 17(2) notice sequence above applies first.
• The response. The respondent has the later of 5 business days after receiving the application or 2 business days after notice of the adjudicator's acceptance — and only if they served a payment schedule in the first place. No schedule, no response: they do not get to argue the merits at all. Where a schedule exists, the response cannot include reasons that were not in it.
• The determination. 10 business days after the response is lodged, or after the response window expires where none is.

Adjudicators decide on documents, so the subcontractor with the organised project file usually wins: notices, delivery dockets, written directions, site instructions, dated photographs, timesheets. Nothing you say at the time will carry weight if it is not written down somewhere with a date on it.

Where the claim is really won: the contract you signed

Your contract's notice clauses interact with the statutory timeline, and the interaction is where good claims die. A variation that never got a written direction, or an EOT notice served two days past the contractual window, is not rescued by the SOP Act — adjudication will hear the claim, but it will hear it on your paperwork. That is why SubSync's contract notices module tracks deadlines from the contract you actually signed, in business days, and drafts the notice against the clause rather than a generic template. Our guide to getting paid for variations walks through the direction-notice-price sequence that keeps a variation claimable.

And the best time to find hostile payment terms is before you sign them, not when the first payment schedule comes back at nil.

Common questions