{"id":"BILL-WA-A97052A7F3DF8F5548258DA800203E8B","name":"Building and Construction Industry (Security of Payment) Amendment Bill 2026","slug":"building-and-construction-industry-security-of-payment-amendment-bill-2026","collection":"bill","jurisdiction":"wa","status":"in_force","isInForce":true,"actNumber":null,"makingDate":"2026-02-25","administeringDepartment":null,"currentVersion":{"id":446157,"registerId":"BILL-WA-A97052A7F3DF8F5548258DA800203E8B:current","compilationNumber":null,"startDate":"2026-02-25","status":"in_force","reasons":null,"registeredAt":"2026-05-08T16:47:31.624Z"},"sections":[{"sectionNumber":"retrieval-0001","sectionType":"document_chunk","heading":"Document excerpt 1","content":"# Building and Construction Industry (Security of Payment) Amendment Bill 2026\n\n58—1 page i\nWestern Australia\nBuilding and Construction Industry (Security of\nPayment) Amendment Bill 2026\nContents\nPart 1 — Preliminary\n1. Short title 2\n2. Commencement 2\nPart 2 — Building and Construction\nIndustry (Security of Payment)\nAct 2021 amended\n3. Act amended 3\n4. Section 3 amended 3\n5. Section 4 amended 3\n6. Section 14 amended 4\n7. Part 3 Division 1A inserted 5\nDivision 1A — Payment withholding\n27A. Terms used 5\n27B. Application of Division 5\n27C. Head contractor must give statement to\nprincipal 6\n27D. Principal may withhold payments 8\n27E. Right to withhold prevails 9\n27F. Adjudication application taken to be\nwithdrawn if progress payment withheld 10\n27G. Payment of amount withheld 11\n8. Section 30 amended 11\n9. Section 34 amended 11\n10. Section 42 amended 12\n11. Section 45 amended 12\n12. Section 50 amended 13\n13. Section 62 amended 13\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nContents\npage ii\n14. Part 4 heading replaced 13\nPart 4 — Statutory trusts\nDivision 1 — Retention money trusts\n15. Section 69 amended 13\n16. Section 70 amended 14\n17. Section 71 amended 15\n18. Section 72 amended 15\n19. Section 73 amended 16\n20. Section 74 amended 16\n21. Section 76 amended 17\n22. Part 4 Division 2 inserted 17\nDivision 2 — Construction trusts\nSubdivision 1 — Preliminary\n76A. Terms used 17\n76B. Continued application of Division 18\nSubdivision 2 — Certain construction contracts\nidentified as trust contracts\n76C. State agency contracts 18\n76D. First-tier subcontracts 19\n76E. Related entity subcontracts 19\nSubdivision 3 — Establishment of construction trust\n76F. Creation of construction trust 21\n76G. Head contractor is both trustee and\nbeneficiary of construction trust 22\n76H. Beneficial interests of contracting parties 23\n76I. Beneficial interests of subcontractors 24\n76J. Determination of amount of construction\npayment entitlement 25\n76K. Dissolution of construction trusts 26\nSubdivision 4 — Construction trust accounts\n76L. Obligations of trustees 27\n76M. Requirements for construction trust\naccounts 28\n76N. Payments into construction trust accounts 29\n76O. Trustee to cover shortfalls 29\n76P. Restriction on withdrawals from\nconstruction trust accounts 30\n76Q. Amounts in construction trust account\nunavailable for trustee’s debts 32\n76R. Insufficient amounts available for\nbeneficiary subcontractors 32\n76S. Closure of construction trust accounts 33\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nContents\npage iii\n23. Part 4 Division 3 heading inserted 34\nDivision 3 — Obligations and restrictions relating to\nstatutory trusts\n24. Section 77 amended 34\n25. Section 78 replaced 35\n78. Trust account interest and fees 35\n26. Section 79 amended 36\n27. Section 83 deleted 36\n28. Section 85A inserted 36\n85A. Effect of assignment of beneficial\nentitlements 36\n29. Section 86 amended 37\n30. Section 87 deleted 37\n31. Section 111 amended 37\n32. Section 112A inserted 38\n112A. No liability against protected parties 38\n33. Section 114 amended 39\n34. Section 115 amended 40\n35. Part 6A inserted 41\nPart 6A — Transitional and savings provisions for\nBuilding and Construction Industry (Security\nof Payment) Amendment Act 2026\n120A. Term used: amending Act 41\n120B. Interpretation Act 1984 not affected 41\n120C. Savings and transitional regulations 41\n120D. Transitional arrangements for construction\ntrusts 41\n120E. Transitional arrangements for\nadjudications and adjudication reviews 42\n36. Various references to “retention money” deleted 43\nPart 3 — Building Services\n(Registration) Act 2011 amended\n37. Act amended 44\n38. Section 17 amended 44\n39. Section 18 amended 44\n\npage 1\nWestern Australia\nLEGISLATIVE ASSEMBLY\nBuilding and Construction Industry (Security of\nPayment) Amendment Bill 2026\nA Bill for\nAn Act to amend the Building and Construction Industry (Security of\nPayment) Act 2021 and to make amendments to the Building Services\n(Registration) Act 2011.\nThe Parliament of Western Australia enacts as follows:\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 1 Preliminary\ns. 1\npage 2\nPart 1 — Preliminary1\n1. Short title2\nThis is the Building and Construction Industry (Security of3\nPayment) Amendment Act 2026.4\n2. Commencement5\nThis Act comes into operation as follows —6\n(a) Part 1 — on the day on which this Act receives the7\nRoyal Assent;8\n(b) the rest of the Act — on a day fixed by proclamation,9\nand different days may be fixed for different provisions.10\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 3\npage 3\nPart 2 — Building and Construction Industry (Security1\nof Payment) Act 2021 amended2\n3. Act amended3\nThis Part amends the Building and Construction Industry4\n(Security of Payment) Act 2021.5\n4. Section 3 amended6\nDelete section 3(2)(c) and insert:7\n8\n(c) providing those persons with statutory remedies9\nand other actions in equity by establishing a10\nsystem of trusts in relation to the following —11\n(i) money retained to secure the12\nperformance of the contractual13\nobligations of those persons;14\n(ii) certain rights, payments and15\nentitlements relating to work or supply16\nundertaken by those persons;17\nand18\n19\n5. Section 4 amended20\nIn section 4(1) insert in alphabetical order:21\n22\nconstruction payment entitlement has the meaning23\ngiven in section 76F(1);24\nconstruction trust has the meaning given in25\nsection 76F(2);26\nconstruction trust account has the meaning given in27\nsection 76A;28\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 6\npage 4\nGTE has the meaning given in the Government1\nTrading Enterprises Act 2023 section 3(1);2\nState agency —3\n(a) has the meaning given in the Procurement4\nAct 2020 section 5; and5\n(b) includes any entity prescribed by the6\nregulations to be a State agency;7\ntrust account means —8\n(a) a construction trust account; or9\n(b) a retention money trust account;10\ntrust contract has the meaning given in section 76A;11\n12\n6. Section 14 amended13\nAfter section 14(2) insert:14\n15\n(3) Subsection (2) does not apply to the following —16\n(a) an express provision in a construction contract17\nif —18\n(i) a principal or a head contractor, who is19\na State agency, is a party to the contract;20\nand21\n(ii) the provision requires a head contractor22\nor subcontractor to pay an amount23\nowing in connection with the contract24\non the same day that the amount is paid25\nto the head contractor or subcontractor;26\n(b) any other provision of the contract or another27\nconstruction contract that facilitates or gives28\neffect to the provision referred to in29\nparagraph (a)(ii).30\n31\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 7\npage 5\n7. Part 3 Division 1A inserted1\nAfter Part 3 Division 1 insert:2\n3\nDivision 1A — Payment withholding4\n27A. Terms used5\nIn this Division —6\nclaim means either or both of the following —7\n(a) a payment claim;8\n(b) a claim, made under a construction contract, for9\nthe payment of an entitlement under the10\nconstruction contract;11\nclaim statement has the meaning given in12\nsection 27C(1).13\n27B. Application of Division14\n(1) In this section —15\nrelevant construction contract means a construction16\ncontract to which a principal and head contractor are17\nparties, but only if —18\n(a) the head contractor is not a State agency or19\nGTE; and20\n(b) the principal of the contract is a State agency or21\nGTE; and22\n(c) if the principal of the contract is a GTE — at23\nthe time the contract is first entered into with24\nthe head contractor, the contract expressly25\nprovides that this Division applies to the26\ncontract;27\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 7\npage 6\nrelevant subcontract means a construction contract to1\nwhich a head contractor and a subcontractor are parties,2\nbut only if —3\n(a) the head contractor is a State agency or GTE;4\nand5\n(b) the subcontractor is not a State agency or GTE;6\nand7\n(c) at the time the contract is first entered into with8\nthe subcontractor, the contract expressly9\nprovides that this Division applies to the10\ncontract.11\n(2) This Division applies to and in relation to —12\n(a) a relevant construction contract; and13\n(b) a relevant subcontract as if —14\n(i) a reference to a head contractor is a15\nreference to the subcontractor who is a16\nparty to the relevant subcontract; and17\n(ii) a reference to a principal is a reference18\nto the head contractor who is a party to19\nthe relevant subcontract.20\n27C. Head contractor must give statement to principal21\n(1) A head contractor of a contract who makes a claim in22\nrelation to the contract must give the principal of the23\ncontract a written statement (a claim statement), in the24\napproved form, in relation to the claim.25\n(2) The claim statement must include the following26\ninformation —27\n(a) whether or not the head contractor has paid the28\nfull amount claimed by each subcontractor29\nengaged by the head contractor in connection30\nwith the contract;31\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 7\npage 7\n(b) if the head contractor has not paid the full1\namount claimed by a subcontractor — the2\nfollowing information in relation to the3\nsubcontractor —4\n(i) the subcontractor’s name;5\n(ii) the amount that has not been paid to the6\nsubcontractor;7\n(iii) details of the unpaid claim made by the8\nsubcontractor;9\n(iv) the reasons the full amount has not been10\npaid;11\n(c) any other information reasonably required by12\nthe principal of the contract.13\n(3) The information set out in subsection (2)(b) is not14\nrequired to be included in a claim statement if —15\n(a) the head contractor has entered a written16\nagreement with the subcontractor to pay less17\nthan the full amount claimed and the agreed18\namount has been paid; or19\n(b) the full amount claimed by the subcontractor20\nwill be paid out of the amount claimed in the21\nclaim for which the statement is prepared.22\n(4) The head contractor must give the claim statement to23\nthe principal of the contract —24\n(a) on the date specified for that purpose in the25\ncontract; or26\n(b) if no date is specified for that purpose in the27\ncontract —28\n(i) if the statement is for a payment29\nclaim — no later than 5 business days30\nbefore the due date for payment under31\nsection 20; or32\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 7\npage 8\n(ii) otherwise — no later than 20 business1\ndays after the claim is made.2\n(5) The principal of the contract may, after receiving the3\nclaim statement, request any further information4\nreasonably required for the principal to assess whether5\nto withhold an amount from the head contractor under6\nsection 27D.7\n(6) A claim made by the head contractor to the principal of8\na contract is not invalid only because a claim statement9\nis not given to the principal.10\n27D. Principal may withhold payments11\n(1) The principal of a contract may, in either or both of the12\nfollowing circumstances, withhold an amount, or part13\nof an amount, forming part of a claim made by a head14\ncontractor —15\n(a) if a claim statement or further information is16\nnot given to the principal in relation to the17\nclaim under section 27C;18\n(b) if, after receiving a claim statement in relation19\nto the claim, the principal reasonably20\nbelieves —21\n(i) the statement or further information22\nrequested by the principal is false or23\nmisleading in a material particular; or24\n(ii) the statement does not comply with this25\nDivision; or26\n(iii) the head contractor who provided the27\nstatement has not complied with Part 4;28\nor29\n(iv) that if the amount is paid, the head30\ncontractor who provided the statement31\nwill not comply with Part 4.32\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 7\npage 9\n(2) The principal of the contract must, as soon as1\nreasonably practicable, give the head contractor written2\nnotice of the withholding.3\n(3) The notice must include the following information —4\n(a) details of the claim for the amount being5\nwithheld;6\n(b) the amount being withheld;7\n(c) the reason for withholding the amount.8\n(4) Part 2 Division 2 and Part 3 Divisions 1 and 2 do not9\napply to, or in relation to, an amount while it is10\nwithheld.11\n(5) A head contractor must not, on the basis of the12\nwithholding —13\n(a) suspend work or supply under section 62; or14\n(b) exercise, under section 64, a lien in relation to15\nany unpaid amount over any unfixed plant or16\nmaterials under the contract; or17\n(c) take any action arising from, or in connection18\nwith, a failure to receive the amount.19\n27E. Right to withhold prevails20\nThe principal of a construction contract to which this21\nDivision applies may withhold, and continue to22\nwithhold, an amount under section 27D in relation to a23\nclaim —24\n(a) despite anything to the contrary in the25\nconstruction contract or any other contract or26\nagreement; and27\n(b) whether the claim is made —28\n(i) under this Act or the contract (or both);29\nor30\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 7\npage 10\n(ii) before or after notice of the withholding1\nis given under section 27D;2\nand3\n(c) whether or not another claim is made in relation4\nto the same amount.5\n27F. Adjudication application taken to be withdrawn if6\nprogress payment withheld7\n(1) This section applies if —8\n(a) a progress payment, or part of a progress9\npayment, is withheld under section 27D; and10\n(b) the claimant has, before the withholding,11\napplied for adjudication of the payment claim12\nfor the progress payment on a ground referred13\nto in section 28(1); and14\n(c) the application has not been finally determined.15\n(2) The adjudication application is taken to be withdrawn16\nunder section 31.17\n(3) The claimant remains liable for the fees and expenses18\nof the adjudicator, if any, incurred or paid by the19\nclaimant before the withdrawal of the adjudication20\napplication under subsection (2).21\n(4) The claimant is not entitled to a refund of the22\napplication fee, if any, paid to an authorised23\nnominating authority for the application.24\n(5) Nothing in this section prevents a person from making25\na new adjudication application in relation to the same26\npayment claim after the progress payment ceases to be27\nwithheld under section 27D.28\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 8\npage 11\n27G. Payment of amount withheld1\n(1) If the principal of a contract is satisfied that the2\ncircumstances set out in section 27D(1) no longer3\napply in relation to an amount withheld, the principal4\nmust, as soon as reasonably practicable, pay the5\namount withheld to the head contractor.6\n(2) The principal of the contract must give the head7\ncontractor written notice of —8\n(a) the principal’s intention to pay the amount9\nwithheld; and10\n(b) the date on which the amount will be paid.11\n12\n8. Section 30 amended13\n(1) In section 30(2) delete “respondent within 1 business day after14\nthe application is made.” and insert:15\n16\nrespondent.17\n18\n(2) After section 30(2) insert:19\n20\n(2A) An adjudication application is not invalid merely21\nbecause subsection (2) is not complied with.22\n23\n9. Section 34 amended24\n(1) In section 34(4) delete “claimant within 1 business day after the25\nresponse is given to the adjudicator.” and insert:26\n27\nclaimant.28\n29\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 10\npage 12\n(2) After section 34(4) insert:1\n2\n(5) An adjudication response is not invalid merely because3\nsubsection (4) is not complied with.4\n5\n10. Section 42 amended6\n(1) In section 42(3) delete “party within 1 business day after the7\napplication is made.” and insert:8\n9\nparty.10\n11\n(2) After section 42(3) insert:12\n13\n(3A) An adjudication review application is not invalid14\nmerely because subsection (3) is not complied with.15\n16\n11. Section 45 amended17\n(1) In section 45(4) delete “review within 1 business day after the18\nresponse is given to the review adjudicator.” and insert:19\n20\nreview.21\n22\n(2) After section 45(4) insert:23\n24\n(5) An adjudication review response is not invalid merely25\nbecause subsection (4) is not complied with.26\n27","sortOrder":0},{"sectionNumber":"retrieval-0002","sectionType":"document_chunk","heading":"Document excerpt 2","content":"Building and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 12\npage 13\n12. Section 50 amended1\nAfter section 50(5)(f) insert:2\n3\n(fa) in the case of an adjudication review — the4\namount of adjudication fees and expenses, and5\nthe proportion of that amount, payable or paid6\nby a party in relation to the adjudication that is7\nthe subject of the review;8\n9\n13. Section 62 amended10\nIn section 62(1)(c) delete “retention money relating to the11\nprogress payment into a retention money trust account as12\nrequired by” and insert:13\n14\nmoney relating to the progress payment that is required to be15\npaid into a trust account under16\n17\n14. Part 4 heading replaced18\nDelete the heading to Part 4 and insert:19\n20\nPart 4 — Statutory trusts21\nDivision 1 — Retention money trusts22\n23\n15. Section 69 amended24\n(1) In section 69(1) and (2) delete “Part —” and insert:25\n26\nDivision —27\n28\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 16\npage 14\n(2) In section 69(3) delete “Part,” and insert:1\n2\nDivision,3\n4\n16. Section 70 amended5\n(1) In section 70(1) delete “Part” (each occurrence) and insert:6\n7\nDivision8\n9\n(2) In section 70(2):10\n(a) delete “Part,” and insert:11\n12\nDivision,13\n14\n(b) in paragraph (c)(ii) delete “Part” and insert:15\n16\nDivision17\n18\n(3) In section 70(3):19\n(a) delete “Part” (1st and 2nd occurrences) and insert:20\n21\nDivision22\n23\n(b) delete “Part.” and insert:24\n25\nDivision.26\n27\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 17\npage 15\n(4) In section 70(4) delete “Part” (each occurrence) and insert:1\n2\nDivision3\n4\nNote: The heading to amended section 70 is to read:5\nConstruction contracts to which Division applies6\n17. Section 71 amended7\n(1) In section 71(1) and (2) delete “Part” and insert:8\n9\nDivision10\n11\n(2) In section 71(3) delete “Part —” and insert:12\n13\nDivision —14\n15\n(3) In section 71(5)(b) delete “Part” and insert:16\n17\nDivision18\n19\n18. Section 72 amended20\n(1) In section 72(1) and (2) delete “Part” and insert:21\n22\nDivision23\n24\n(2) Delete section 72(3).25\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 19\npage 16\n19. Section 73 amended1\nIn section 73 in the note delete “Part.” and insert:2\n3\nDivision.4\n5\n20. Section 74 amended6\n(1) In section 74(1) delete “Part” (each occurrence) and insert:7\n8\nDivision9\n10\n(2) After section 74(1) insert:11\n12\n(1A) A party to a construction contract who, without13\nreasonable excuse, fails to comply with subsection (1)14\ncommits an offence.15\nPenalty for this subsection: a fine of $50 000.16\n17\n(3) In section 74(2) delete “Part” (each occurrence) and insert:18\n19\nDivision20\n21\n(4) After section 74(5) insert:22\n23\n(6) Despite subsections (4) and (5), a single retention24\nmoney trust account must be established for all25\nretention money required to be retained under a26\ncontract for which a construction trust is created under27\nDivision 2.28\n29\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 21\npage 17\n21. Section 76 amended1\nAfter section 76(2)(g) insert:2\n3\n(ga) for the purpose of withdrawing accrued interest4\nin accordance with section 78(5); or5\n6\n22. Part 4 Division 2 inserted7\nAfter section 76 insert:8\n9\nDivision 2 — Construction trusts10\nSubdivision 1 — Preliminary11\n76A. Terms used12\nIn this Division —13\nconstruction payment has the meaning given in14\nsection 76F(1);15\nconstruction trust account, for a construction trust,16\nmeans an account opened in accordance with this17\nDivision for the purposes of the construction trust;18\ncontracting party, for a trust contract, means the party19\nto the contract —20\n(a) for whom construction work is to be carried21\nout; or22\n(b) to whom related goods and services are to be23\nsupplied;24\nexempt contract means a construction contract of a25\nkind prescribed by the regulations for the purposes of26\nthis Division;27\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 22\npage 18\nprescribed construction money threshold means the1\namount prescribed by the regulations for the purposes2\nof this Division;3\ntrust contract means the following —4\n(a) a State agency contract (as defined in5\nsection 76C);6\n(b) a first-tier subcontract (as defined in7\nsection 76D(1));8\n(c) a related entity subcontract (as defined in9\nsection 76E(2)).10\n76B. Continued application of Division11\nA trust contract continues to be a trust contract12\nregardless of any variation or other amendment of the13\ncontract after the date on which the contract is first14\nentered into.15\nSubdivision 2 — Certain construction contracts identified as16\ntrust contracts17\n76C. State agency contracts18\nA construction contract is a State agency contract if —19\n(a) a principal and head contractor are parties to20\nthe contract; and21\n(b) the principal is a State agency or GTE; and22\n(c) the head contractor is not a State agency or23\nGTE; and24\n(d) at the time the contract is first entered into —25\n(i) if the principal is a State agency — it is26\nnot an exempt contract and the value of27\nthe contract is equal to, or more than,28\nthe prescribed construction money29\nthreshold; or30\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 22\npage 19\n(ii) if the principal is a State agency or1\nGTE — it expressly provides that it is a2\ntrust contract for the purposes of this3\nDivision.4\n76D. First-tier subcontracts5\n(1) A construction contract is a first-tier subcontract if —6\n(a) a head contractor and a subcontractor (a7\nfirst-tier subcontractor) are parties to the8\ncontract; and9\n(b) the head contractor is a State agency or GTE;10\nand11\n(c) at the time the contract is first entered into with12\nthe first-tier subcontractor, the contract13\nexpressly provides that it is a trust contract for14\nthe purposes of this Division; and15\n(d) the first-tier subcontractor is not a State agency16\nor GTE.17\n(2) This Division applies to a first-tier subcontract as if a18\nreference to a head contractor in section 76G is a19\nreference to a first-tier subcontractor.20\n76E. Related entity subcontracts21\n(1) In this section —22\nfamily member, of a person, means —23\n(a) the person’s spouse; or24\n(b) a parent of the person or the person’s spouse; or25\n(c) a grandparent of the person or the person’s26\nspouse; or27\n(d) a brother, sister, aunt, uncle, nephew, niece or28\ncousin of the person or the person’s spouse; or29\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 22\npage 20\n(e) a child of the person or the person’s spouse; or1\n(f) a grandchild of the person or the person’s2\nspouse; or3\n(g) the spouse of any person referred to in4\nparagraphs (b) to (f);5\nrelated body corporate has the meaning given in the6\nCorporations Act 2001 (Cth) section 9;7\nrelated entity, of a party to a trust contract, means the8\nfollowing —9\n(a) a family member of the party;10\n(b) a related body corporate of the party;11\n(c) a corporation in which the party or a family12\nmember of the party has an interest of at13\nleast 50%;14\n(d) a person with an interest of at least 50% in the15\nparty, and any family member of the person;16\n(e) the trustee of a trust, other than a construction17\ntrust, in relation to which the party, a family18\nmember of the party or a related body corporate19\nof the party is a beneficiary;20\n(f) the beneficiary of a trust, other than a21\nconstruction trust, in relation to which the22\nparty, a family member of the party or a related23\nbody corporate of the party is a trustee;24\n(g) a person, or class of persons, prescribed by the25\nregulations;26\nspouse, of a person, means an individual who is —27\n(a) lawfully married to the person; or28\n(b) the de facto partner of the person.29\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 22\npage 21\n(2) A construction contract is a related entity subcontract1\nif —2\n(a) a party to another trust contract enters into the3\nconstruction contract with a subcontractor; and4\n(b) the subcontractor is —5\n(i) a related entity of the party to the other6\ntrust contract (a related entity7\nsubcontractor); and8\n(ii) a beneficiary of the construction trust9\nfor the other trust contract.10\n(3) Subsection (2)(a) does not apply to or in relation to a11\nparty or a subcontractor who is a State agency or a12\nGTE.13\n(4) A construction trust created for the related entity14\nsubcontract is a separate construction trust from the15\nconstruction trust created for the other trust contract.16\n(5) This Division applies to and in relation to a related17\nentity subcontract as if a reference to a head contractor18\nin section 76G is a reference to the related entity19\nsubcontractor.20\nSubdivision 3 — Establishment of construction trust21\n76F. Creation of construction trust22\n(1) In this section —23\nconstruction payment, for a trust contract, means any24\namount paid by the contracting party for the trust25\ncontract to the trustee of the trust in connection with26\nthe performance of the trust contract;27\nconstruction payment entitlement, in relation to a trust28\ncontract, means a person’s right or entitlement to be29\npaid in connection with the performance of the trust30\ncontract.31\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 22\npage 22\n(2) A construction trust for a trust contract is a trust over1\nthe following, which are taken to be held on trust by2\nthe trustee of the trust from the creation of the trust —3\n(a) all construction payments for the trust contract4\nreceived by the trustee;5\n(b) the trustee’s construction payment entitlements6\nin relation to the trust contract.7\n(3) A construction trust for a trust contract is created on8\nthe day on which the first of the following occurs —9\n(a) a construction payment for the trust contract is10\nfirst received by the trustee of the construction11\ntrust;12\n(b) an amount is first paid into a construction trust13\naccount for the construction trust.14\n76G. Head contractor is both trustee and beneficiary of15\nconstruction trust16\n(1) The head contractor for a trust contract —17\n(a) is the trustee of the construction trust for the18\ntrust contract; and19\n(b) is both the trustee and a beneficiary of the trust.20\n(2) The head contractor —21\n(a) becomes the trustee and a beneficiary of the22\nconstruction trust when the trust is created; and23\n(b) ceases to be the trustee and a beneficiary of the24\ntrust when the trust is lawfully dissolved.25\n(3) The head contractor has a beneficial interest in the26\nfollowing —27\n(a) any amount paid in advance by the principal for28\nthe purpose of reimbursing the following, if29\nspecified in the trust contract —30\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 22\npage 23\n(i) costs incurred by the head contractor; or1\n(ii) the head contractor’s margin;2\n(b) the amount held on trust after subtracting all3\namounts the beneficiaries, other than the4\ntrustee, are entitled to be paid in connection5\nwith the trust.6\n(4) Subsection (3)(a) does not apply to the head contractor7\nunless the trust contract expressly provides that the8\nprovision applies.9\n(5) If a court, in the exercise of its jurisdiction to supervise10\nthe administration of the construction trust, replaces the11\ntrustee of the trust, the replacement trustee must carry12\nout all of the obligations of the trustee under this Act in13\nrelation to the administration of the trust.14\n76H. Beneficial interests of contracting parties15\n(1) In this section —16\nadvance payment, in relation to a trust contract —17\n(a) means a payment, including a prepayment or a18\ndeposit, made in advance of the performance of19\nan obligation under, or in connection with, the20\ncontract, whether made before or after a21\nconstruction trust account is opened for the22\nconstruction trust for the contract; but23\n(b) does not include any amount in which a person,24\nother than the contracting party for the contract,25\nhas a beneficial interest.26\n(2) A contracting party for a trust contract who makes an27\nadvance payment in relation to the contract —28\n(a) is a beneficiary of the construction trust for the29\ntrust contract; and30\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 22\npage 24\n(b) has a beneficial interest in the advance1\npayment.2\nExample for this subsection:3\nIf the contracting party pays $50 000 in advance and a4\nsubcontractor has a construction payment entitlement of5\n$20 000, the contracting party’s advance payment is6\nreduced to $30 000.7\n(3) The contracting party —8\n(a) becomes a beneficiary of the construction trust9\nwhen the trust is created; and10\n(b) ceases to be a beneficiary of the construction11\ntrust when the trust is lawfully dissolved.12\n76I. Beneficial interests of subcontractors13\n(1) A subcontractor is a beneficiary of a construction trust14\nfor a trust contract if the subcontractor enters into a15\nconstruction contract with the trustee of the16\nconstruction trust to carry out construction work or17\nsupply related goods and services in connection with18\nthe performance of the trust contract.19\n(2) The subcontractor has a beneficial interest in the20\nproperty of the construction trust to the extent of the21\nsubcontractor’s construction payment entitlement in22\nrelation to the trust contract.23\n(3) The subcontractor —24\n(a) becomes a beneficiary of the construction trust25\nwhen the work is carried out or the related26\ngoods and services are supplied by the27\nsubcontractor in connection with the28\nperformance of the trust contract; and29\n(b) ceases to be a beneficiary of the construction30\ntrust when the trust is lawfully dissolved.31\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 22\npage 25\n(4) The subcontractor’s construction payment entitlement1\nin relation to the trust contract arises on the day on2\nwhich the subcontractor carries out the work or3\nsupplies the related goods and services in connection4\nwith the performance of the trust contract, whether or5\nnot —6\n(a) the right to receive payment under the contract7\nhas been confirmed, asserted or verified; or8\n(b) the amount of the payment has been9\ndetermined; or10\n(c) the payment has become payable; or11\n(d) a claim for the payment has been made or12\ndetermined.13\n76J. Determination of amount of construction payment14\nentitlement15\n(1) Subject to subsection (3), the amount of a person’s16\nconstruction payment entitlement in relation to a trust17\ncontract is limited to the following amounts, if18\napplicable —19\n(a) an amount certified as the amount owed to the20\nperson in a certificate or indicated in a payment21\nschedule given to the person under —22\n(i) the trust contract; or23\n(ii) a subcontract under which the person24\nundertakes to carry out work or supply25\nrelated goods and services in connection26\nwith the performance of the trust27\ncontract;28\n(b) an amount the parties to the trust contract or the29\nsubcontract agree in writing to be the person’s30\nconstruction payment entitlement in relation to31\nthe trust contract.32\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 22\npage 26\n(2) If at least 2 of the amounts referred to in subsection (1)1\nspecify different amounts for the same construction2\npayment entitlement of the person, the amount of the3\nperson’s construction payment entitlement is taken to4\nbe the highest amount of whichever of the following5\napplies —6\n(a) the scheduled amount indicated in the payment7\nschedule;8\n(b) the amount certified as the amount owed to the9\nperson;10\n(c) the agreed amount.11\n(3) The amount of a person’s construction payment12\nentitlement in relation to a trust contract is the amount,13\nif any, payable under an order, determination or14\ndecision made by a court, tribunal or other15\ndecision-maker in relation to an amount referred to in16\nsubsection (1).17\n76K. Dissolution of construction trusts18\nA construction trust for a trust contract is dissolved —19\n(a) for a trust contract other than a related entity20\nsubcontract — on the date, if any, specified for21\nthat purpose in the trust contract; or22\n(b) if no date is specified for that purpose or the23\ntrust contract is a related entity subcontract —24\non whichever of the following occurs first —25\n(i) the day occurring 6 months after the last26\nday on which a progress payment claim27\nfor a final payment for the trust contract28\nmay be made under section 23(5);29","sortOrder":1},{"sectionNumber":"retrieval-0003","sectionType":"document_chunk","heading":"Document excerpt 3","content":"Building and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 22\npage 27\n(ii) the date on which the only remaining1\nwork to be carried out under the trust2\ncontract is work that may be carried out3\nunder an exempt contract.4\nSubdivision 4 — Construction trust accounts5\n76L. Obligations of trustees6\n(1) The trustee of a construction trust must open a7\nconstruction trust account with a recognised financial8\ninstitution.9\n(2) The construction trust account for a trust contract must10\nbe opened —11\n(a) within 10 business days after entering into the12\ntrust contract; or13\n(b) if a period is specified in the trust contract —14\nwithin that period.15\n(3) A single construction trust account must not be used16\nfor more than 1 construction trust.17\n(4) A construction trust account for a construction trust18\nmust not be used for any of the following —19\n(a) retention money held on trust under Division 1;20\n(b) money held on trust in relation to a different21\nconstruction trust;22\n(c) any other purpose that is not related to the23\nconstruction trust for which the account was24\nopened.25\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 22\npage 28\n76M. Requirements for construction trust accounts1\n(1) The following requirements apply to a construction2\ntrust account opened under this Division —3\n(a) the account must be a deposit or transaction4\naccount of the recognised financial institution;5\n(b) the name of the account and the description of6\nthe account must include the words “trust7\naccount”.8\n(2) The trustee of a construction trust must, as soon as9\npracticable, give written notice of the account to —10\n(a) each person who is or becomes a beneficiary of11\nthe trust; and12\n(b) the contracting party for the trust contract.13\n(3) The notice must contain the following information —14\n(a) the name of the recognised financial institution15\nwith which the account has been opened;16\n(b) the name of the account;17\n(c) the BSB number and account number for the18\naccount;19\n(d) that all construction payments for the trust20\ncontract are required to be paid into the21\naccount;22\n(e) any other information prescribed by the23\nregulations.24\n(4) The trustee of a construction trust must give written25\nnotice of any change in the information contained in26\nthe notice, as soon as practicable after the change27\noccurs, to —28\n(a) each person who is a beneficiary of the trust;29\nand30\n(b) the contracting party for the trust contract.31\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 22\npage 29\n76N. Payments into construction trust accounts1\n(1) A contracting party for a trust contract who has been2\nnotified of the establishment of a construction trust3\naccount by a trustee must make all construction4\npayments for the trust contract into the account,5\nincluding payments made in accordance with the6\nfollowing —7\n(a) a determination of an adjudicator or review8\nadjudicator under Part 3;9\n(b) a decision of an arbitrator in any arbitration10\nunder the contract;11\n(c) a decision of an expert appointed under the12\ncontract;13\n(d) an order of a court or tribunal.14\n(2) If an amount is paid, in contravention of subsection (1),15\ninto another account held by the trustee, the trustee16\nmust, within 24 hours of becoming aware of the17\npayment, pay the same amount into the construction18\ntrust account.19\n76O. Trustee to cover shortfalls20\n(1) This section applies if there is an insufficient amount21\navailable in a construction trust account to pay an22\namount due and payable to a beneficiary of the trust on23\nthe day on which a construction payment for the trust24\ncontract is paid into the account.25\n(2) The trustee must immediately deposit an amount equal26\nto the difference between the amount available in the27\naccount for payment and the amount to be paid from28\nthe account.29\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 22\npage 30\n(3) This section does not apply to a trustee who is1\ninsolvent (as defined in the Building Services2\n(Registration) Act 2011 section 63A(1)).3\n76P. Restriction on withdrawals from construction trust4\naccounts5\n(1) A trustee must not withdraw money from a6\nconstruction trust account other than in accordance7\nwith this section.8\n(2) Money may be withdrawn from a construction trust9\naccount only as follows —10\n(a) for the purpose of making a payment relating to11\na person’s beneficial interest in the construction12\ntrust;13\n(b) for the purpose of withdrawing the money in14\naccordance with section 76S(3);15\n(c) in accordance with the determination of an16\nadjudicator or review adjudicator under Part 3;17\n(d) in accordance with a decision of an arbitrator;18\n(e) in accordance with an order of a court or19\ntribunal;20\n(f) in accordance with a decision of an expert21\nappointed to determine a matter under a trust22\ncontract in relation to which the account was23\nestablished;24\n(g) for the purpose of returning money paid into25\nthe account in error;26\n(h) for the purpose of transferring money to27\nanother trust account opened in accordance28\nwith this Division;29\n(i) for the purpose of withdrawing accrued interest30\nin accordance with section 78(5);31\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 22\npage 31\n(j) for the purpose of exercising the right to an1\nindemnity from the trust for the trustee’s2\nexpenses in administering the trust in the3\ncircumstances set out in —4\n(i) if a direction of a kind prescribed by the5\nregulations is obtained from a court —6\nsection 86(b) or (c); or7\n(ii) section 86(a);8\n(k) for any other purpose, or in any other9\ncircumstances, prescribed by the regulations.10\n(3) For the purposes of subsection (2)(a), a payment relates11\nto a person’s beneficial interest in the construction trust12\nfor a trust contract if the payment is made —13\n(a) to the person in accordance with this Act; or14\n(b) to repay an amount paid by the trustee of the15\nconstruction trust to the person before the16\ncontracting party for the trust contract has paid17\nthe trustee.18\n(4) Money may be withdrawn from a construction trust19\naccount only —20\n(a) by cheque or electronic funds transfer; and21\n(b) in accordance with any other requirements22\nprescribed by the regulations, including23\nrequirements for notices of proposed24\nwithdrawals.25\n(5) A trustee is taken to have withdrawn an amount from a26\nconstruction trust account if —27\n(a) the trustee authorises another person to make28\nthe withdrawal; or29\n(b) the trustee knowingly contributes to the30\nwithdrawal being made.31\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 22\npage 32\n76Q. Amounts in construction trust account unavailable1\nfor trustee’s debts2\n(1) An amount paid, or required to be paid, into a3\nconstruction trust account held by a trustee must not4\nbe —5\n(a) used to recover a debt owed to a creditor of the6\ntrustee; or7\n(b) attached or taken in execution under a court8\norder or process for the benefit of a creditor of9\nthe trustee.10\n(2) Subsection (1) —11\n(a) applies in relation to the trustee, whether in the12\ncapacity of trustee or otherwise; and13\n(b) ceases to apply to an amount once lawfully14\nwithdrawn from the trust account; and15\n(c) does not apply to the extent that it would16\ninterfere with the right of a beneficiary, other17\nthan a beneficiary who is also the trustee, under18\nthis Division.19\n76R. Insufficient amounts available for beneficiary20\nsubcontractors21\n(1) This section applies if —22\n(a) a trustee of a construction trust is required to23\npay 2 or more other beneficiaries an amount24\nfrom the construction trust account at the same25\ntime; and26\n(b) the total amount held in the construction trust27\naccount is insufficient to satisfy the full amount28\nrequired to be paid to each beneficiary; and29\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 22\npage 33\n(c) the trustee has not complied with its obligation1\nto cover the insufficient amount; and2\n(d) the trustee is a corporation under external3\nadministration (as defined in the Corporations4\nAct 2001 (Cth) Schedule 2).5\n(2) The trustee must, in accordance with the regulations,6\napply to a court for a direction in relation to the7\npayment to the beneficiaries of the construction trust.8\n(3) Nothing in this section relieves the trustee of the9\nliability to pay in full the amounts the beneficiaries are10\nentitled to be paid in connection with the trust contract.11\n76S. Closure of construction trust accounts12\n(1) A trustee may close a construction trust account —13\n(a) for the purpose of transferring the account to14\nanother financial institution; or15\n(b) if the construction trust is lawfully dissolved.16\n(2) The trustee must, as soon as practicable after closing17\nthe account, give written notice of the closure to —18\n(a) each former beneficiary of the trust; and19\n(b) the contracting party for the trust contract.20\n(3) In closing the account, the trustee may pay itself the21\nfollowing amounts —22\n(a) any amount for interest that the trustee is23\nentitled to under section 78;24\n(b) any remaining amount that is not owing to25\nanother beneficiary of the trust.26\n27\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 23\npage 34\n23. Part 4 Division 3 heading inserted1\nBefore section 77 insert:2\n3\nDivision 3 — Obligations and restrictions relating to4\nstatutory trusts5\n6\n24. Section 77 amended7\n(1) At the beginning of section 77 insert:8\n9\n(1) In this section —10\nrelevant matter means any of the following —11\n(a) the amount of retention money required to be12\npaid into, or withdrawn from, a retention13\nmoney trust account;14\n(b) the amount of a payment required to be paid15\ninto, or withdrawn from, a construction trust16\naccount;17\n(c) the amount of a person’s construction payment18\nentitlement in relation to a trust contract.19\n20\n(2) In section 77 delete “A decision on retention money that is21\nrequired to be paid into, or that can be withdrawn from, a22\nretention money trust account” and insert:23\n24\n(2) A decision on a relevant matter25\n26\nNote: The heading to amended section 77 is to read:27\nDecisions on amounts of retention money, construction28\npayments and construction payment entitlements29\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 25\npage 35\n25. Section 78 replaced1\nDelete section 78 and insert:2\n3\n78. Trust account interest and fees4\n(1) A trustee who holds money on trust in a trust account5\nmust not invest the money held on trust in any form of6\ninvestment other than in accordance with this section.7\n(2) Subject to subsections (3) and (4), the trustee is entitled8\nto receive interest (the accrued interest) earned on the9\nmoney held in the trust account.10\n(3) Interest earned on money held in the trust account for a11\nbeneficiary of the trust is payable to the beneficiary if12\nthe interest is earned on the money after it has become13\npayable to the beneficiary.14\n(4) However, any interest payable to the beneficiary must15\nbe offset against any liability to pay interest to the16\nbeneficiary for late payment of the money.17\n(5) The trustee may withdraw an amount equal to the18\ntrustee’s entitlement to the accrued interest —19\n(a) once in each period prescribed by the20\nregulations; and21\n(b) at any time on or after —22\n(i) for a retention money trust account —23\nthe retention money trust end date; or24\n(ii) for a construction trust account — the25\ndissolution of the trust.26\n(6) The fees and charges payable to the recognised27\nfinancial institution for the establishment and operation28\nof a trust account are payable by the party who29\nestablished the account.30\n31\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 26\npage 36\n26. Section 79 amended1\nAfter section 79(3) insert:2\n3\n(3A) A party to a construction contract who, without4\nreasonable excuse, fails to comply with5\nsubsection (3)(a) commits an offence.6\nPenalty for this subsection: a fine of $50 000.7\n8\n27. Section 83 deleted9\nDelete section 83.10\n28. Section 85A inserted11\nAfter section 85 insert:12\n13\n85A. Effect of assignment of beneficial entitlements14\n(1) An assignment by a subcontractor of the15\nsubcontractor’s entitlement to an amount arising under16\nsection 76I and held on trust under this Part is of no17\neffect.18\n(2) A trustee is not entitled to offset, against the19\nsubcontractor’s entitlement, any liability of the20\nsubcontractor under another contract.21\n(3) If a trustee assigns any entitlement to recourse to22\nmoney held on trust under this Part —23\n(a) the money continues to be held on trust under24\nthis Part; and25\n(b) this Act continues to apply to the assigned26\namount of money held on trust in the same way27\nas it applied to the money before the28\nassignment; and29\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 29\npage 37\n(c) the beneficial interest in the trust of any other1\nparty to the contract is not affected by the2\nassignment.3\n4\n29. Section 86 amended5\n(1) Delete section 86(b) and insert:6\n7\n(b) the trustee is a corporation under external8\nadministration (as defined in the Corporations9\nAct 2001 (Cth) Schedule 2);10\n11\n(2) At the end of section 86 insert:12\n13\nNote for this section:14\nThe right to an indemnity from a trust permitted in the15\ncircumstances set out in paragraphs (b) and (c) is subject to16\ncertain requirements in relation to a construction trust — see17\nsection 76P(2)(j)(i).18\n19\n30. Section 87 deleted20\nDelete section 87.21\n31. Section 111 amended22\nAfter section 111(2) insert:23\n24\n(3) Nothing in this section is taken to affect the operation25\nof Part 3 Division 1A or Part 4 Division 2 in relation to26\na contract that expressly provides that a provision of27\neither Division applies to the contract.28\n29\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 32\npage 38\n32. Section 112A inserted1\nAfter section 112 insert:2\n3\n112A. No liability against protected parties4\n(1) In this section —5\nprotected party means any of the following —6\n(a) the State;7\n(b) the Minister and any other Minister of the8\nState;9\n(c) a State agency or GTE;10\n(d) an employee of a State agency or GTE;11\n(e) a person acting under the direction of a person12\nreferred to in paragraph (a), (b), (c) or (d),13\nincluding an agent, contractor or advisor;14\nrelevant provision —15\n(a) means section 14(3) or a provision of Part 316\nDivision 1A or Part 4; and17\n(b) includes any subsidiary legislation made under,18\nor for the purposes of, those provisions.19\n(2) A protected party is not liable to any action, liability or20\ndemand arising (whether under a contract or otherwise)21\nfrom the following —22\n(a) the enactment, commencement or operation of23\na relevant provision;24\n(b) the affecting of a liability by a relevant25\nprovision;26\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 33\npage 39\n(c) compliance, or purported compliance, in good1\nfaith, with a requirement of a relevant2\nprovision;3\n(d) the doing of, or omitting to do, any other act,4\nmatter or thing, in good faith in the5\nperformance, or purported performance, of a6\nfunction —7\n(i) under a relevant provision; or8\n(ii) under any other law relating to9\nconstruction trusts; or10\n(iii) in connection with a construction trust;11\n(e) the exercise of any right under, or granted by, a12\nrelevant provision.13\n(3) The State is also relieved of any liability arising from14\nany other person doing, or omitting to do, anything15\ndescribed in subsection (2)(c) or (d).16\n17\n33. Section 114 amended18\n(1) Before section 114(1) insert:19\n20\n(1A) In this section —21\nagency and chief executive officer have the meanings22\ngiven in the Public Sector Management Act 199423\nsection 3(1).24\n25\n(2) In section 114(2):26\n(a) delete “published by the Building Commissioner”;27","sortOrder":2},{"sectionNumber":"retrieval-0004","sectionType":"document_chunk","heading":"Document excerpt 4","content":"Building and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 34\npage 40\n(b) delete “the Building Commissioner directs when1\npublishing the approved form that it is recommended but2\nnot mandatory.” and insert:3\n4\nspecified otherwise in the approved form when it is5\npublished.6\n7\n(3) In section 114(3) delete “published by the Building8\nCommissioner”.9\n(4) After section 114(3) insert:10\n11\n(4) For the purposes of section 27C, the Building12\nCommissioner may delegate the function under13\nsubsection (1) to the chief executive officer of any14\nagency.15\n(5) An approved form is taken not to be given in16\naccordance with this Act if —17\n(a) information in the form must be verified by a18\nstatutory declaration and is not; or19\n(b) the form is required to be accompanied by a20\ndocument and is not.21\n22\n34. Section 115 amended23\nIn section 115(1) delete “of this Act.” and insert:24\n25\nof this Act, other than Part 4 Divisions 2 and 3 (to the extent to26\nwhich they relate to construction trusts).27\n28\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 35\npage 41\n35. Part 6A inserted1\nAfter section 120 insert:2\n3\nPart 6A — Transitional and savings provisions4\nfor Building and Construction Industry (Security5\nof Payment) Amendment Act 20266\n120A. Term used: amending Act7\nIn this Part —8\namending Act means the Building and Construction9\nIndustry (Security of Payment) Amendment Act 2026.10\n120B. Interpretation Act 1984 not affected11\nThis Part applies in addition to the Interpretation12\nAct 1984 and does not limit or otherwise affect the13\noperation of the provisions of that Act.14\n120C. Savings and transitional regulations15\nRegulations made under section 119 may include16\nprovisions of a savings or transitional nature that arise17\nas a result of the enactment of, or the coming into18\noperation of, the amending Act.19\n120D. Transitional arrangements for construction trusts20\n(1) Section 14, as amended by the amending Act, extends21\nto and in relation to a construction contract entered into22\nbefore the day on which that amendment comes into23\noperation.24\n(2) Part 3 Division 1A, as inserted by the amending Act,25\ndoes not apply to, or in relation to, a construction26\ncontract entered into before the day on which that27\nDivision comes into operation.28\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 2 Building and Construction Industry (Security of Payment)\nAct 2021 amended\ns. 35\npage 42\n(3) Part 4 Division 2, as inserted by the amending Act,1\ndoes not apply to, or in relation to —2\n(a) a construction contract entered into before the3\nday on which that Division comes into4\noperation; or5\n(b) a construction contract entered into —6\n(i) after the day on which that Division7\ncomes into operation; and8\n(ii) in connection with a contract referred to9\nin paragraph (a).10\n(4) Despite subsection (3), regulations made under11\nsection 119 may provide that Part 4 Division 2, as12\ninserted by the amending Act, applies to and in relation13\nto a construction contract entered into before the day14\non which that Division comes into operation.15\n120E. Transitional arrangements for adjudications and16\nadjudication reviews17\n(1) In this section —18\ncommencement day means the day on which the19\namending Act section 8 comes into operation;20\npre-commencement determination means —21\n(a) an adjudicator’s determination made under22\nsection 38 before commencement day; or23\n(b) a review adjudicator’s determination made24\nunder section 48 before commencement day;25\nrelevant former provision means any of the following26\nprovisions as in force immediately before27\ncommencement day —28\n(a) section 30(2);29\n(b) section 34(4);30\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nBuilding and Construction Industry (Security of Payment)\nAct 2021 amended\nPart 2\ns. 36\npage 43\n(c) section 42(3);1\n(d) section 45(4).2\n(2) A pre-commencement determination cannot be3\nquashed or set aside on or after commencement day on4\nthe basis that a relevant former provision was not5\ncomplied with or didn’t need to be complied with.6\n(3) An adjudication application or adjudication review7\napplication made, but not yet determined, before8\ncommencement day, and any response given in relation9\nto the application, are not invalid merely because a10\nrelevant former provision was not complied with.11\n12\n36. Various references to “retention money” deleted13\nIn the provisions listed in the Table delete “retention money”.14\nTable15\ns. 79(1), (2)(a), (3) and (5) s. 80(1) and (3)\ns. 81(1) s. 82(3)\ns. 85(3)\n\nBuilding and Construction Industry (Security of Payment) Amendment\nBill 2026\nPart 3 Building Services (Registration) Act 2011 amended\ns. 37\npage 44\nPart 3 — Building Services (Registration) Act 20111\namended2\n37. Act amended3\nThis Part amends the Building Services (Registration) Act 2011.4\n38. Section 17 amended5\nAfter section 17(2) insert:6\n7\n(3) In making a decision under this section, the Board may8\ntake into account events or matters occurring after the9\napplicant applied for registration or renewal.10\n11\n39. Section 18 amended12\nAfter section 18(2) insert:13\n14\n(3) In making a decision under this section, the Board may15\ntake into account events or matters occurring after the16\napplicant applied for registration or renewal.17\n18","sortOrder":3}],"analysis":{"summary":{"status_summary":"The bill is at second reading stage in the Western Australian Legislative Council.","complexity_score":8,"likely_questions":["What is the prescribed construction money threshold for a State agency contract to be a trust contract?","Does the construction trust regime apply to subcontracts below that threshold?","Can a head contractor use a single trust account for multiple projects?","What happens if a principal withholds payment but the head contractor disputes the reason?","Are there any exemptions for small builders or private sector projects?","What are the record-keeping or audit requirements for construction trust accounts?","Does the bill change the rules for retention money trusts beyond the new penalty?"],"complexity_factors":["Introduces a new statutory trust regime with detailed trustee duties, beneficiary definitions, and account management requirements","Creates a payment withholding power that interacts with existing adjudication and suspension rights","Defines multiple categories of 'trust contract' with opt-in and threshold conditions","Includes numerous cross-references to other parts of the Act and regulations","Adds new offences and penalties that increase compliance risk","Contains transitional provisions that differ for withholding (prospective) and trust provisions (prospective with possible retrospective extension)"],"plain_english_summary":"The Bill tightens WA’s security-of-payment regime by giving State agencies and government trading enterprises power to withhold payments from head contractors who fail to provide verifiable subcontract payment statements, and by creating statutory \"construction trusts\" that ring‑fence payments for certain government-related contracts and subcontracts.\n\nThat imposes new trustee duties, separate trust accounts, an offence for failing to establish a retention trust (fine noted), restrictions on assigning trust interests, and significant cash‑flow and compliance impacts for head contractors and subcontractors."},"flash_summary":{"complexity_score":8,"scope_assessment":{"changed":true,"description":"Yes. The Bill significantly broadens the original focus of the Building and Construction Industry (Security of Payment) Act 2021. The original statute was centred on progress payment rules and retention-money trusts. This amendment creates a new, broader regime of construction trusts that capture all construction payments and payment entitlements for specified State-related contracts (ss. 76F–76G), extends statutory remedies beyond retention money to these construction payments (s. 3(2)(c) replacement), and gives State principals a new power to withhold payments from head contractors (Division 1A, ss. 27C–27G). It also adds State immunity for acts under the new provisions (s. 112A) and inserts criminal penalties and significant administrative duties on trustees. Altogether, the Bill moves the Act from a narrower retention-money/security-of-payment framework to a larger statutory-trust regime focused on public-sector contracting chains and payment flow control."},"complexity_factors":["Large number of new sections (Division 1A: ss. 27A–27G; Division 2: ss. 76A–76S) expanding Part 3 and Part 4","Multiple newly defined terms added to the interpretation section (e.g. construction trust, construction payment entitlement, trust contract, trust account, related entity, GTE, State agency)","Numerous cross-references to other statutes (Procurement Act 2020, Government Trading Enterprises Act 2023, Corporations Act 2001, Building Services (Registration) Act 2011)","Nested categories of contracts (State agency contracts, first-tier subcontracts, related-entity subcontracts) with opt-in and threshold triggers (ss. 76C–76E)","Multiple conditional rules and exceptions (e.g. trustee insolvency exceptions s. 76O(3), transitional carve-outs in Part 6A ss. 120D–120E)","New criminal/penalty provisions and administrative sanctions (two $50,000 penalties: s. 74(1A) and s. 79(3A))","Detailed operational requirements for trust accounts (opening timelines, single-account prohibition, permitted withdrawal categories, notice requirements: ss. 76L–76P)","Regulatory delegation for many operational details (prescribed thresholds, exemptions, frequency of interest withdrawal, prescribed persons in s. 76E(g)) increasing interpretive complexity","Introduction of State immunity (s. 112A) changing legal remedies and enforcement pathways","Transitional provisions that treat pre-commencement contracts differently and preserve some earlier technical rules for pre-existing determinations (Part 6A, s. 120E)"],"plain_english_summary":"**What this Bill changes (mechanically)\n\n- Introduces a payment-withholding power for principals that are State agencies or government trading enterprises (GTEs). A head contractor who makes a payment claim must give a written “claim statement” to the principal disclosing whether subcontractors have been paid; the principal may withhold part or all of a claim if the statement is missing, false, or indicates the head contractor will not comply with new trust rules (see new Division 1A: sections 27C–27G).\n\n- Creates a new class of statutory trusts called \"construction trusts\" that capture money and payment rights connected to certain government-related construction contracts. The trust arises automatically when the first construction payment is received or when money is first paid into a dedicated construction trust account (see Division 2: sections 76A–76S, especially 76F and 76G).\n\n- Identifies which contracts become \"trust contracts\": (a) State agency contracts above a regulatory threshold or contracts that expressly opt in; (b) first-tier subcontracts where the head contractor is a State agency/GTE and the subcontract expressly opts in; and (c) related-entity subcontracts involving certain affiliated entities (see sections 76C–76E).\n\n- Requires the trustee (normally the head contractor) to open a dedicated construction trust account for each construction trust, keep funds separate, and require contracting parties to pay all construction payments into that account (see sections 76L–76N). Separate accounts must be used for different trusts (s. 76L(3)).\n\n- Restricts withdrawals from construction trust accounts to specified purposes (payments to beneficiaries, adjudicator or court orders, transfers between trust accounts, returning money paid in error, withdrawing accrued interest in limited circumstances, etc.) and requires electronic or cheque withdrawals and other formalities (s. 76P).\n\n- Gives subcontractors a direct beneficial interest in trust funds equal to their \"construction payment entitlement,\" which generally arises when they perform work or supply goods/services (sections 76I and 76J). Trust funds are protected from trustee creditors and attachment while in the trust account (s. 76Q).\n\n- Imposes obligations on trustees to top up accounts immediately if there is an insufficient balance to pay beneficiaries (s. 76O) and to apply to a court for directions if an insolvent trustee cannot meet simultaneous beneficiary claims (s. 76R).\n\n- Provides criminal fines for some failures to comply (for example, failing to establish a single retention-money trust account where required and failing to give certain notices) — a penalty of up to $50,000 is added in two places (see amendments to s. 74(1A) and new s. 79(3A)).\n\n- Changes adjudication procedure rules to make some timing defaults less technically fatal: failing to serve certain documents within the previous 1-business-day time limit no longer invalidates an adjudication application, response, review application or review response (see amendments to ss. 30, 34, 42, 45 and the new transitional section 120E).\n\n- Limits legal liability for the State, ministers, State agencies/GTEs, employees and their agents for actions arising from the enactment, operation or good-faith compliance with the withholding and trust provisions (new s. 112A).\n\n- Adds transitional rules saying the new construction-trust rules and withholding division apply only to contracts entered into after commencement (unless regulations provide otherwise), while some other changes extend to earlier contracts (see Part 6A, ss. 120D–120E).\n\n- Minor parallel change: permits the Building Services Registration Board to consider events occurring after an application when deciding registration or renewal (amendments to the Building Services (Registration) Act 2011, s. 17 & s. 18).\n\nWho is affected and in what way\n\n- Subcontractors and suppliers on trust contracts: gain a statutory beneficial interest in trust funds (s. 76I), protection from trustee creditors while funds are in the trust account (s. 76Q), and new procedural protections for getting paid from dedicated accounts. These are direct, concentrated benefits.\n\n- Head contractors (usually trustees): bear new administrative duties — open and operate separate trust accounts (s. 76L–76M), deposit construction payments into them (s. 76N), top up shortfalls (s. 76O), and restrict withdrawals to specified categories (s. 76P). They also must supply claim statements to State principals (s. 27C). Non-compliance can attract fines and criminal offences in some instances (s. 74(1A), s. 79(3A)).\n\n- Principals that are State agencies or GTEs: obtain the power to withhold part or all of a head contractor’s payment claim for non-compliance or suspected false statements (s. 27D–27E). They also receive immunity from liability for acting under the new provisions in good faith (s. 112A).\n\n- Private contracting parties generally: some trust rules apply only to State-related contracts (s. 76B–76E and Part 6A transitional rules). The core expansion targets public-sector contracting chains above a prescribed threshold or where parties opt in.\n\nWhy the Bill matters (official purpose-claims and a pragmatic test)\n\n- Official purpose-claim: the Bill aims to secure subcontractor payments and prevent diversion of public-contracted funds by creating enforceable trusts and giving principals a withholding tool to ensure compliance (see explanatory structure: new Division 1A and Division 2 of Part 4).\n\n- Testing the claim against costs, incentives and trade-offs:\n  - Who pays: head contractors shoulder direct compliance costs — opening and operating dedicated trust accounts (bank fees, internal accounting), preparing claim statements, and possibly topping up shortfalls (s. 76L–76O). Those costs may be priced into tenders, increasing the cost to the State (see ss. 76M(4), 78(6)).\n  - Liquidity and cashflow effects: principals’ withholding power (s. 27D) creates a new immediate cashflow risk for head contractors: funds that would otherwise be available can be withheld pending the principal’s assessment. That raises the probability of liquidity squeezes for head contractors and may pass on costs or higher margins to contracting parties.\n  - Enforcement and litigation risk shifting: the State’s immunity from liability for acting under the provisions (s. 112A) reduces the ability of contractors to sue the State for mistaken withholding or administrative error, concentrating enforcement remedies against trustees/head contractors and increasing the importance of adjudication and court directions.\n  - Compliance burden and operational risk: the requirement for separate accounts per trust (s. 76L(3)), formal notice and verification steps (s. 76M(2)–(4), s. 114 amendments), and criminal penalties for some failures (s. 74(1A), s. 79(3A)) raises administrative overhead and the risk that smaller contractors may struggle to comply.\n  - Insolvency interaction: trust funds are ring-fenced from trustee creditors while in the account (s. 76Q), but protections depend on trustees actually keeping funds in the specified accounts and on bank/administration timing. The trustee-top-up obligation (s. 76O) and court-direction route for external administration (s. 76R) provide remedies but create practical enforcement and timing issues during insolvency.\n  - Potential for substitution or gaming: principals can withhold payments to induce compliance; conversely, head contractors might move funds or restructure subcontracting to fall outside the new trusts (the Bill defines \"related entities\" and opt-in triggers to limit simple avoidance — see s. 76E). The Act also lets the regulations exempt contracts or set thresholds, which may shift behaviour to stay below the prescribed thresholds.\n  - Administrative discretion and regulatory detail: many operational rules are left to regulations (prescribed thresholds, exemptions, prescribed classes in s. 76E(g), frequency for interest withdrawal in s. 78(5), and withdrawal notice rules in s. 76P(4)). The effectiveness will therefore depend heavily on regulatory design and regulator capacity.\n\nNet effect on private choice and markets (mechanics, not value judgement)\n\n- The Bill increases statutory controls on how public-sector construction money is held and disbursed (s. 76F–76N). That reduces contractual freedom for head contractors dealing with State agencies or GTEs for covered contracts, because the principal’s right to withhold (s. 27E) overrides contrary contract terms.\n\n- The measures reassign some payment risk away from public-sector contracting parties (who can withhold and obtain immunity) toward head contractors (who must hold funds in trust and top up shortfalls). This shifts incentives in procurement pricing, potential entry decisions by contractors, and subcontractor protections.\n\nImplementation and compliance risks\n\n- Opening and operating separate trust accounts per contract (s. 76L(2)–(3)) is operationally heavy for firms with many contracts. Bank fees are payable by the party who established the account (s. 78(6)).\n\n- Enforcement of trustee top-up duties (s. 76O) and timely adjudication of disputes (Part 3) will be critical; the Bill softens a technical-adjudication timing issue (removing strict 1 business day invalidity traps in ss. 30, 34, 42, 45) but otherwise leaves practical enforcement to court directions and adjudication.\n\n- The State’s statutory immunity (s. 112A) reduces counterparty litigation against the State and increases reliance on administrative remedies and litigation against private trustees.\n\nOverall: the Bill expands statutory trust protections for subcontractors in State-related construction chains, creates a formal mechanism for State principals to withhold payments where trust compliance is in doubt, and places significant new administrative and financial obligations on head contractors acting as trustees (key sections: Part 3 Division 1A — ss. 27C–27G; Part 4 Division 2 — ss. 76A–76S; immunity — s. 112A)."}},"importantCases":[],"_links":{"self":"/api/acts/building-and-construction-industry-security-of-payment-amendment-bill-2026","history":"/api/acts/building-and-construction-industry-security-of-payment-amendment-bill-2026/history","analysis":"/api/acts/building-and-construction-industry-security-of-payment-amendment-bill-2026/analysis","conflicts":"/api/acts/building-and-construction-industry-security-of-payment-amendment-bill-2026/conflicts","importantCases":"/api/acts/building-and-construction-industry-security-of-payment-amendment-bill-2026/important-cases","documents":"/api/acts/building-and-construction-industry-security-of-payment-amendment-bill-2026/documents"}}