The Victorian security of payment regime will see significant changes as a result of the introduction of the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Bill 2025 (‘Bill’), set to take effect no later than 1 September 2026. Once in effect, the changes will crucially apply to construction contracts entered before, on, or after the commencement date. However, the changes will not apply in circumstances where a payment claim has been served, an adjudication has commenced, or an adjudication certificate has been issued.

The major changes are:

1. The removal of a ‘reference date’ for the purpose of calculating when a payment claim must be made and introduced that payment claims may be made the last day of each named month in which the works or related goods and services were supplied.
2. A right to recourse of performance security is subject to giving at least 5 business days’ written notice of the party’s intention to exercise that right.
3. Repealing provisions in the SOP Act that allow respondents to include new reasons for withholding payment of a claim there were not provided in the payment schedule. No new reasons can be included in an adjudication response or considered by an adjudicator if those reasons were not in the payment schedule.
4. Adjudicators can declare time bars as ‘unfair’ where it is ‘unreasonably onerous’ or ‘not reasonably possible’ to comply with the clause.
5. Introducing a streamlined process to expedite enforcing unpaid adjudication determinations in court as a judgment debt. A person will not be prevented from commencing separate proceedings under a construction contract to recover amounts that have been overpaid or underpaid or have recourse to security.
6. The exclusion of ‘business days’ from applying during the Christmas shutdown period from 22 December to 10 January, aligning with industry shutdown periods.
7. Clauses in construction contract providing for payment later than 20 business days after a payment claim is served to be found void.