Building and Construction Industry (Security of Payment) Amendment Bill 2026

58—1 page i Western Australia Building and Construction Industry (Security of Payment) Amendment Bill 2026 Contents Part 1 — Preliminary

1. Short title 2
2. Commencement 2 Part 2 — Building and Construction Industry (Security of Payment) Act 2021 amended
3. Act amended 3
4. Section 3 amended 3
5. Section 4 amended 3
6. Section 14 amended 4
7. Part 3 Division 1A inserted 5 Division 1A — Payment withholding 27A. Terms used 5 27B. Application of Division 5 27C. Head contractor must give statement to principal 6 27D. Principal may withhold payments 8 27E. Right to withhold prevails 9 27F. Adjudication application taken to be withdrawn if progress payment withheld 10 27G. Payment of amount withheld 11
8. Section 30 amended 11
9. Section 34 amended 11
10. Section 42 amended 12
11. Section 45 amended 12
12. Section 50 amended 13
13. Section 62 amended 13

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Contents page ii 14. Part 4 heading replaced 13 Part 4 — Statutory trusts Division 1 — Retention money trusts 15. Section 69 amended 13 16. Section 70 amended 14 17. Section 71 amended 15 18. Section 72 amended 15 19. Section 73 amended 16 20. Section 74 amended 16 21. Section 76 amended 17 22. Part 4 Division 2 inserted 17 Division 2 — Construction trusts Subdivision 1 — Preliminary 76A. Terms used 17 76B. Continued application of Division 18 Subdivision 2 — Certain construction contracts identified as trust contracts 76C. State agency contracts 18 76D. First-tier subcontracts 19 76E. Related entity subcontracts 19 Subdivision 3 — Establishment of construction trust 76F. Creation of construction trust 21 76G. Head contractor is both trustee and beneficiary of construction trust 22 76H. Beneficial interests of contracting parties 23 76I. Beneficial interests of subcontractors 24 76J. Determination of amount of construction payment entitlement 25 76K. Dissolution of construction trusts 26 Subdivision 4 — Construction trust accounts 76L. Obligations of trustees 27 76M. Requirements for construction trust accounts 28 76N. Payments into construction trust accounts 29 76O. Trustee to cover shortfalls 29 76P. Restriction on withdrawals from construction trust accounts 30 76Q. Amounts in construction trust account unavailable for trustee’s debts 32 76R. Insufficient amounts available for beneficiary subcontractors 32 76S. Closure of construction trust accounts 33

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Contents page iii 23. Part 4 Division 3 heading inserted 34 Division 3 — Obligations and restrictions relating to statutory trusts 24. Section 77 amended 34 25. Section 78 replaced 35 78. Trust account interest and fees 35 26. Section 79 amended 36 27. Section 83 deleted 36 28. Section 85A inserted 36 85A. Effect of assignment of beneficial entitlements 36 29. Section 86 amended 37 30. Section 87 deleted 37 31. Section 111 amended 37 32. Section 112A inserted 38 112A. No liability against protected parties 38 33. Section 114 amended 39 34. Section 115 amended 40 35. Part 6A inserted 41 Part 6A — Transitional and savings provisions for Building and Construction Industry (Security of Payment) Amendment Act 2026 120A. Term used: amending Act 41 120B. Interpretation Act 1984 not affected 41 120C. Savings and transitional regulations 41 120D. Transitional arrangements for construction trusts 41 120E. Transitional arrangements for adjudications and adjudication reviews 42 36. Various references to “retention money” deleted 43 Part 3 — Building Services (Registration) Act 2011 amended 37. Act amended 44 38. Section 17 amended 44 39. Section 18 amended 44

page 1 Western Australia LEGISLATIVE ASSEMBLY Building and Construction Industry (Security of Payment) Amendment Bill 2026 A Bill for An Act to amend the Building and Construction Industry (Security of Payment) Act 2021 and to make amendments to the Building Services (Registration) Act 2011. The Parliament of Western Australia enacts as follows:

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 1 Preliminary s. 1 page 2 Part 1 — Preliminary1

1. Short title2 This is the Building and Construction Industry (Security of3 Payment) Amendment Act 2026.4
2. Commencement5 This Act comes into operation as follows —6 (a) Part 1 — on the day on which this Act receives the7 Royal Assent;8 (b) the rest of the Act — on a day fixed by proclamation,9 and different days may be fixed for different provisions.10

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 3 page 3 Part 2 — Building and Construction Industry (Security1 of Payment) Act 2021 amended2 3. Act amended3 This Part amends the Building and Construction Industry4 (Security of Payment) Act 2021.5 4. Section 3 amended6 Delete section 3(2)(c) and insert:7 8 (c) providing those persons with statutory remedies9 and other actions in equity by establishing a10 system of trusts in relation to the following —11 (i) money retained to secure the12 performance of the contractual13 obligations of those persons;14 (ii) certain rights, payments and15 entitlements relating to work or supply16 undertaken by those persons;17 and18 19 5. Section 4 amended20 In section 4(1) insert in alphabetical order:21 22 construction payment entitlement has the meaning23 given in section 76F(1);24 construction trust has the meaning given in25 section 76F(2);26 construction trust account has the meaning given in27 section 76A;28

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 6 page 4 GTE has the meaning given in the Government1 Trading Enterprises Act 2023 section 3(1);2 State agency —3 (a) has the meaning given in the Procurement4 Act 2020 section 5; and5 (b) includes any entity prescribed by the6 regulations to be a State agency;7 trust account means —8 (a) a construction trust account; or9 (b) a retention money trust account;10 trust contract has the meaning given in section 76A;11 12 6. Section 14 amended13 After section 14(2) insert:14 15 (3) Subsection (2) does not apply to the following —16 (a) an express provision in a construction contract17 if —18 (i) a principal or a head contractor, who is19 a State agency, is a party to the contract;20 and21 (ii) the provision requires a head contractor22 or subcontractor to pay an amount23 owing in connection with the contract24 on the same day that the amount is paid25 to the head contractor or subcontractor;26 (b) any other provision of the contract or another27 construction contract that facilitates or gives28 effect to the provision referred to in29 paragraph (a)(ii).30 31

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 7 page 5 7. Part 3 Division 1A inserted1 After Part 3 Division 1 insert:2 3 Division 1A — Payment withholding4 27A. Terms used5 In this Division —6 claim means either or both of the following —7 (a) a payment claim;8 (b) a claim, made under a construction contract, for9 the payment of an entitlement under the10 construction contract;11 claim statement has the meaning given in12 section 27C(1).13 27B. Application of Division14 (1) In this section —15 relevant construction contract means a construction16 contract to which a principal and head contractor are17 parties, but only if —18 (a) the head contractor is not a State agency or19 GTE; and20 (b) the principal of the contract is a State agency or21 GTE; and22 (c) if the principal of the contract is a GTE — at23 the time the contract is first entered into with24 the head contractor, the contract expressly25 provides that this Division applies to the26 contract;27

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 7 page 6 relevant subcontract means a construction contract to1 which a head contractor and a subcontractor are parties,2 but only if —3 (a) the head contractor is a State agency or GTE;4 and5 (b) the subcontractor is not a State agency or GTE;6 and7 (c) at the time the contract is first entered into with8 the subcontractor, the contract expressly9 provides that this Division applies to the10 contract.11 (2) This Division applies to and in relation to —12 (a) a relevant construction contract; and13 (b) a relevant subcontract as if —14 (i) a reference to a head contractor is a15 reference to the subcontractor who is a16 party to the relevant subcontract; and17 (ii) a reference to a principal is a reference18 to the head contractor who is a party to19 the relevant subcontract.20 27C. Head contractor must give statement to principal21 (1) A head contractor of a contract who makes a claim in22 relation to the contract must give the principal of the23 contract a written statement (a claim statement), in the24 approved form, in relation to the claim.25 (2) The claim statement must include the following26 information —27 (a) whether or not the head contractor has paid the28 full amount claimed by each subcontractor29 engaged by the head contractor in connection30 with the contract;31

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 7 page 7 (b) if the head contractor has not paid the full1 amount claimed by a subcontractor — the2 following information in relation to the3 subcontractor —4 (i) the subcontractor’s name;5 (ii) the amount that has not been paid to the6 subcontractor;7 (iii) details of the unpaid claim made by the8 subcontractor;9 (iv) the reasons the full amount has not been10 paid;11 (c) any other information reasonably required by12 the principal of the contract.13 (3) The information set out in subsection (2)(b) is not14 required to be included in a claim statement if —15 (a) the head contractor has entered a written16 agreement with the subcontractor to pay less17 than the full amount claimed and the agreed18 amount has been paid; or19 (b) the full amount claimed by the subcontractor20 will be paid out of the amount claimed in the21 claim for which the statement is prepared.22 (4) The head contractor must give the claim statement to23 the principal of the contract —24 (a) on the date specified for that purpose in the25 contract; or26 (b) if no date is specified for that purpose in the27 contract —28 (i) if the statement is for a payment29 claim — no later than 5 business days30 before the due date for payment under31 section 20; or32

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 7 page 8 (ii) otherwise — no later than 20 business1 days after the claim is made.2 (5) The principal of the contract may, after receiving the3 claim statement, request any further information4 reasonably required for the principal to assess whether5 to withhold an amount from the head contractor under6 section 27D.7 (6) A claim made by the head contractor to the principal of8 a contract is not invalid only because a claim statement9 is not given to the principal.10 27D. Principal may withhold payments11 (1) The principal of a contract may, in either or both of the12 following circumstances, withhold an amount, or part13 of an amount, forming part of a claim made by a head14 contractor —15 (a) if a claim statement or further information is16 not given to the principal in relation to the17 claim under section 27C;18 (b) if, after receiving a claim statement in relation19 to the claim, the principal reasonably20 believes —21 (i) the statement or further information22 requested by the principal is false or23 misleading in a material particular; or24 (ii) the statement does not comply with this25 Division; or26 (iii) the head contractor who provided the27 statement has not complied with Part 4;28 or29 (iv) that if the amount is paid, the head30 contractor who provided the statement31 will not comply with Part 4.32

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 7 page 9 (2) The principal of the contract must, as soon as1 reasonably practicable, give the head contractor written2 notice of the withholding.3 (3) The notice must include the following information —4 (a) details of the claim for the amount being5 withheld;6 (b) the amount being withheld;7 (c) the reason for withholding the amount.8 (4) Part 2 Division 2 and Part 3 Divisions 1 and 2 do not9 apply to, or in relation to, an amount while it is10 withheld.11 (5) A head contractor must not, on the basis of the12 withholding —13 (a) suspend work or supply under section 62; or14 (b) exercise, under section 64, a lien in relation to15 any unpaid amount over any unfixed plant or16 materials under the contract; or17 (c) take any action arising from, or in connection18 with, a failure to receive the amount.19 27E. Right to withhold prevails20 The principal of a construction contract to which this21 Division applies may withhold, and continue to22 withhold, an amount under section 27D in relation to a23 claim —24 (a) despite anything to the contrary in the25 construction contract or any other contract or26 agreement; and27 (b) whether the claim is made —28 (i) under this Act or the contract (or both);29 or30

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 7 page 10 (ii) before or after notice of the withholding1 is given under section 27D;2 and3 (c) whether or not another claim is made in relation4 to the same amount.5 27F. Adjudication application taken to be withdrawn if6 progress payment withheld7 (1) This section applies if —8 (a) a progress payment, or part of a progress9 payment, is withheld under section 27D; and10 (b) the claimant has, before the withholding,11 applied for adjudication of the payment claim12 for the progress payment on a ground referred13 to in section 28(1); and14 (c) the application has not been finally determined.15 (2) The adjudication application is taken to be withdrawn16 under section 31.17 (3) The claimant remains liable for the fees and expenses18 of the adjudicator, if any, incurred or paid by the19 claimant before the withdrawal of the adjudication20 application under subsection (2).21 (4) The claimant is not entitled to a refund of the22 application fee, if any, paid to an authorised23 nominating authority for the application.24 (5) Nothing in this section prevents a person from making25 a new adjudication application in relation to the same26 payment claim after the progress payment ceases to be27 withheld under section 27D.28

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 8 page 11 27G. Payment of amount withheld1 (1) If the principal of a contract is satisfied that the2 circumstances set out in section 27D(1) no longer3 apply in relation to an amount withheld, the principal4 must, as soon as reasonably practicable, pay the5 amount withheld to the head contractor.6 (2) The principal of the contract must give the head7 contractor written notice of —8 (a) the principal’s intention to pay the amount9 withheld; and10 (b) the date on which the amount will be paid.11 12 8. Section 30 amended13 (1) In section 30(2) delete “respondent within 1 business day after14 the application is made.” and insert:15 16 respondent.17 18 (2) After section 30(2) insert:19 20 (2A) An adjudication application is not invalid merely21 because subsection (2) is not complied with.22 23 9. Section 34 amended24 (1) In section 34(4) delete “claimant within 1 business day after the25 response is given to the adjudicator.” and insert:26 27 claimant.28 29

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 10 page 12 (2) After section 34(4) insert:1 2 (5) An adjudication response is not invalid merely because3 subsection (4) is not complied with.4 5 10. Section 42 amended6 (1) In section 42(3) delete “party within 1 business day after the7 application is made.” and insert:8 9 party.10 11 (2) After section 42(3) insert:12 13 (3A) An adjudication review application is not invalid14 merely because subsection (3) is not complied with.15 16 11. Section 45 amended17 (1) In section 45(4) delete “review within 1 business day after the18 response is given to the review adjudicator.” and insert:19 20 review.21 22 (2) After section 45(4) insert:23 24 (5) An adjudication review response is not invalid merely25 because subsection (4) is not complied with.26 27

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 12 page 13 12. Section 50 amended1 After section 50(5)(f) insert:2 3 (fa) in the case of an adjudication review — the4 amount of adjudication fees and expenses, and5 the proportion of that amount, payable or paid6 by a party in relation to the adjudication that is7 the subject of the review;8 9 13. Section 62 amended10 In section 62(1)(c) delete “retention money relating to the11 progress payment into a retention money trust account as12 required by” and insert:13 14 money relating to the progress payment that is required to be15 paid into a trust account under16 17 14. Part 4 heading replaced18 Delete the heading to Part 4 and insert:19 20 Part 4 — Statutory trusts21 Division 1 — Retention money trusts22 23 15. Section 69 amended24 (1) In section 69(1) and (2) delete “Part —” and insert:25 26 Division —27 28

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 16 page 14 (2) In section 69(3) delete “Part,” and insert:1 2 Division,3 4 16. Section 70 amended5 (1) In section 70(1) delete “Part” (each occurrence) and insert:6 7 Division8 9 (2) In section 70(2):10 (a) delete “Part,” and insert:11 12 Division,13 14 (b) in paragraph (c)(ii) delete “Part” and insert:15 16 Division17 18 (3) In section 70(3):19 (a) delete “Part” (1st and 2nd occurrences) and insert:20 21 Division22 23 (b) delete “Part.” and insert:24 25 Division.26 27

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 17 page 15 (4) In section 70(4) delete “Part” (each occurrence) and insert:1 2 Division3 4 Note: The heading to amended section 70 is to read:5 Construction contracts to which Division applies6 17. Section 71 amended7 (1) In section 71(1) and (2) delete “Part” and insert:8 9 Division10 11 (2) In section 71(3) delete “Part —” and insert:12 13 Division —14 15 (3) In section 71(5)(b) delete “Part” and insert:16 17 Division18 19 18. Section 72 amended20 (1) In section 72(1) and (2) delete “Part” and insert:21 22 Division23 24 (2) Delete section 72(3).25

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 19 page 16 19. Section 73 amended1 In section 73 in the note delete “Part.” and insert:2 3 Division.4 5 20. Section 74 amended6 (1) In section 74(1) delete “Part” (each occurrence) and insert:7 8 Division9 10 (2) After section 74(1) insert:11 12 (1A) A party to a construction contract who, without13 reasonable excuse, fails to comply with subsection (1)14 commits an offence.15 Penalty for this subsection: a fine of $50 000.16 17 (3) In section 74(2) delete “Part” (each occurrence) and insert:18 19 Division20 21 (4) After section 74(5) insert:22 23 (6) Despite subsections (4) and (5), a single retention24 money trust account must be established for all25 retention money required to be retained under a26 contract for which a construction trust is created under27 Division 2.28 29

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 21 page 17 21. Section 76 amended1 After section 76(2)(g) insert:2 3 (ga) for the purpose of withdrawing accrued interest4 in accordance with section 78(5); or5 6 22. Part 4 Division 2 inserted7 After section 76 insert:8 9 Division 2 — Construction trusts10 Subdivision 1 — Preliminary11 76A. Terms used12 In this Division —13 construction payment has the meaning given in14 section 76F(1);15 construction trust account, for a construction trust,16 means an account opened in accordance with this17 Division for the purposes of the construction trust;18 contracting party, for a trust contract, means the party19 to the contract —20 (a) for whom construction work is to be carried21 out; or22 (b) to whom related goods and services are to be23 supplied;24 exempt contract means a construction contract of a25 kind prescribed by the regulations for the purposes of26 this Division;27

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 22 page 18 prescribed construction money threshold means the1 amount prescribed by the regulations for the purposes2 of this Division;3 trust contract means the following —4 (a) a State agency contract (as defined in5 section 76C);6 (b) a first-tier subcontract (as defined in7 section 76D(1));8 (c) a related entity subcontract (as defined in9 section 76E(2)).10 76B. Continued application of Division11 A trust contract continues to be a trust contract12 regardless of any variation or other amendment of the13 contract after the date on which the contract is first14 entered into.15 Subdivision 2 — Certain construction contracts identified as16 trust contracts17 76C. State agency contracts18 A construction contract is a State agency contract if —19 (a) a principal and head contractor are parties to20 the contract; and21 (b) the principal is a State agency or GTE; and22 (c) the head contractor is not a State agency or23 GTE; and24 (d) at the time the contract is first entered into —25 (i) if the principal is a State agency — it is26 not an exempt contract and the value of27 the contract is equal to, or more than,28 the prescribed construction money29 threshold; or30

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 22 page 19 (ii) if the principal is a State agency or1 GTE — it expressly provides that it is a2 trust contract for the purposes of this3 Division.4 76D. First-tier subcontracts5 (1) A construction contract is a first-tier subcontract if —6 (a) a head contractor and a subcontractor (a7 first-tier subcontractor) are parties to the8 contract; and9 (b) the head contractor is a State agency or GTE;10 and11 (c) at the time the contract is first entered into with12 the first-tier subcontractor, the contract13 expressly provides that it is a trust contract for14 the purposes of this Division; and15 (d) the first-tier subcontractor is not a State agency16 or GTE.17 (2) This Division applies to a first-tier subcontract as if a18 reference to a head contractor in section 76G is a19 reference to a first-tier subcontractor.20 76E. Related entity subcontracts21 (1) In this section —22 family member, of a person, means —23 (a) the person’s spouse; or24 (b) a parent of the person or the person’s spouse; or25 (c) a grandparent of the person or the person’s26 spouse; or27 (d) a brother, sister, aunt, uncle, nephew, niece or28 cousin of the person or the person’s spouse; or29

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 22 page 20 (e) a child of the person or the person’s spouse; or1 (f) a grandchild of the person or the person’s2 spouse; or3 (g) the spouse of any person referred to in4 paragraphs (b) to (f);5 related body corporate has the meaning given in the6 Corporations Act 2001 (Cth) section 9;7 related entity, of a party to a trust contract, means the8 following —9 (a) a family member of the party;10 (b) a related body corporate of the party;11 (c) a corporation in which the party or a family12 member of the party has an interest of at13 least 50%;14 (d) a person with an interest of at least 50% in the15 party, and any family member of the person;16 (e) the trustee of a trust, other than a construction17 trust, in relation to which the party, a family18 member of the party or a related body corporate19 of the party is a beneficiary;20 (f) the beneficiary of a trust, other than a21 construction trust, in relation to which the22 party, a family member of the party or a related23 body corporate of the party is a trustee;24 (g) a person, or class of persons, prescribed by the25 regulations;26 spouse, of a person, means an individual who is —27 (a) lawfully married to the person; or28 (b) the de facto partner of the person.29

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 22 page 21 (2) A construction contract is a related entity subcontract1 if —2 (a) a party to another trust contract enters into the3 construction contract with a subcontractor; and4 (b) the subcontractor is —5 (i) a related entity of the party to the other6 trust contract (a related entity7 subcontractor); and8 (ii) a beneficiary of the construction trust9 for the other trust contract.10 (3) Subsection (2)(a) does not apply to or in relation to a11 party or a subcontractor who is a State agency or a12 GTE.13 (4) A construction trust created for the related entity14 subcontract is a separate construction trust from the15 construction trust created for the other trust contract.16 (5) This Division applies to and in relation to a related17 entity subcontract as if a reference to a head contractor18 in section 76G is a reference to the related entity19 subcontractor.20 Subdivision 3 — Establishment of construction trust21 76F. Creation of construction trust22 (1) In this section —23 construction payment, for a trust contract, means any24 amount paid by the contracting party for the trust25 contract to the trustee of the trust in connection with26 the performance of the trust contract;27 construction payment entitlement, in relation to a trust28 contract, means a person’s right or entitlement to be29 paid in connection with the performance of the trust30 contract.31

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 22 page 22 (2) A construction trust for a trust contract is a trust over1 the following, which are taken to be held on trust by2 the trustee of the trust from the creation of the trust —3 (a) all construction payments for the trust contract4 received by the trustee;5 (b) the trustee’s construction payment entitlements6 in relation to the trust contract.7 (3) A construction trust for a trust contract is created on8 the day on which the first of the following occurs —9 (a) a construction payment for the trust contract is10 first received by the trustee of the construction11 trust;12 (b) an amount is first paid into a construction trust13 account for the construction trust.14 76G. Head contractor is both trustee and beneficiary of15 construction trust16 (1) The head contractor for a trust contract —17 (a) is the trustee of the construction trust for the18 trust contract; and19 (b) is both the trustee and a beneficiary of the trust.20 (2) The head contractor —21 (a) becomes the trustee and a beneficiary of the22 construction trust when the trust is created; and23 (b) ceases to be the trustee and a beneficiary of the24 trust when the trust is lawfully dissolved.25 (3) The head contractor has a beneficial interest in the26 following —27 (a) any amount paid in advance by the principal for28 the purpose of reimbursing the following, if29 specified in the trust contract —30

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 22 page 23 (i) costs incurred by the head contractor; or1 (ii) the head contractor’s margin;2 (b) the amount held on trust after subtracting all3 amounts the beneficiaries, other than the4 trustee, are entitled to be paid in connection5 with the trust.6 (4) Subsection (3)(a) does not apply to the head contractor7 unless the trust contract expressly provides that the8 provision applies.9 (5) If a court, in the exercise of its jurisdiction to supervise10 the administration of the construction trust, replaces the11 trustee of the trust, the replacement trustee must carry12 out all of the obligations of the trustee under this Act in13 relation to the administration of the trust.14 76H. Beneficial interests of contracting parties15 (1) In this section —16 advance payment, in relation to a trust contract —17 (a) means a payment, including a prepayment or a18 deposit, made in advance of the performance of19 an obligation under, or in connection with, the20 contract, whether made before or after a21 construction trust account is opened for the22 construction trust for the contract; but23 (b) does not include any amount in which a person,24 other than the contracting party for the contract,25 has a beneficial interest.26 (2) A contracting party for a trust contract who makes an27 advance payment in relation to the contract —28 (a) is a beneficiary of the construction trust for the29 trust contract; and30

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 22 page 24 (b) has a beneficial interest in the advance1 payment.2 Example for this subsection:3 If the contracting party pays $50 000 in advance and a4 subcontractor has a construction payment entitlement of5 $20 000, the contracting party’s advance payment is6 reduced to $30 000.7 (3) The contracting party —8 (a) becomes a beneficiary of the construction trust9 when the trust is created; and10 (b) ceases to be a beneficiary of the construction11 trust when the trust is lawfully dissolved.12 76I. Beneficial interests of subcontractors13 (1) A subcontractor is a beneficiary of a construction trust14 for a trust contract if the subcontractor enters into a15 construction contract with the trustee of the16 construction trust to carry out construction work or17 supply related goods and services in connection with18 the performance of the trust contract.19 (2) The subcontractor has a beneficial interest in the20 property of the construction trust to the extent of the21 subcontractor’s construction payment entitlement in22 relation to the trust contract.23 (3) The subcontractor —24 (a) becomes a beneficiary of the construction trust25 when the work is carried out or the related26 goods and services are supplied by the27 subcontractor in connection with the28 performance of the trust contract; and29 (b) ceases to be a beneficiary of the construction30 trust when the trust is lawfully dissolved.31

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 22 page 25 (4) The subcontractor’s construction payment entitlement1 in relation to the trust contract arises on the day on2 which the subcontractor carries out the work or3 supplies the related goods and services in connection4 with the performance of the trust contract, whether or5 not —6 (a) the right to receive payment under the contract7 has been confirmed, asserted or verified; or8 (b) the amount of the payment has been9 determined; or10 (c) the payment has become payable; or11 (d) a claim for the payment has been made or12 determined.13 76J. Determination of amount of construction payment14 entitlement15 (1) Subject to subsection (3), the amount of a person’s16 construction payment entitlement in relation to a trust17 contract is limited to the following amounts, if18 applicable —19 (a) an amount certified as the amount owed to the20 person in a certificate or indicated in a payment21 schedule given to the person under —22 (i) the trust contract; or23 (ii) a subcontract under which the person24 undertakes to carry out work or supply25 related goods and services in connection26 with the performance of the trust27 contract;28 (b) an amount the parties to the trust contract or the29 subcontract agree in writing to be the person’s30 construction payment entitlement in relation to31 the trust contract.32

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 22 page 26 (2) If at least 2 of the amounts referred to in subsection (1)1 specify different amounts for the same construction2 payment entitlement of the person, the amount of the3 person’s construction payment entitlement is taken to4 be the highest amount of whichever of the following5 applies —6 (a) the scheduled amount indicated in the payment7 schedule;8 (b) the amount certified as the amount owed to the9 person;10 (c) the agreed amount.11 (3) The amount of a person’s construction payment12 entitlement in relation to a trust contract is the amount,13 if any, payable under an order, determination or14 decision made by a court, tribunal or other15 decision-maker in relation to an amount referred to in16 subsection (1).17 76K. Dissolution of construction trusts18 A construction trust for a trust contract is dissolved —19 (a) for a trust contract other than a related entity20 subcontract — on the date, if any, specified for21 that purpose in the trust contract; or22 (b) if no date is specified for that purpose or the23 trust contract is a related entity subcontract —24 on whichever of the following occurs first —25 (i) the day occurring 6 months after the last26 day on which a progress payment claim27 for a final payment for the trust contract28 may be made under section 23(5);29

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 22 page 27 (ii) the date on which the only remaining1 work to be carried out under the trust2 contract is work that may be carried out3 under an exempt contract.4 Subdivision 4 — Construction trust accounts5 76L. Obligations of trustees6 (1) The trustee of a construction trust must open a7 construction trust account with a recognised financial8 institution.9 (2) The construction trust account for a trust contract must10 be opened —11 (a) within 10 business days after entering into the12 trust contract; or13 (b) if a period is specified in the trust contract —14 within that period.15 (3) A single construction trust account must not be used16 for more than 1 construction trust.17 (4) A construction trust account for a construction trust18 must not be used for any of the following —19 (a) retention money held on trust under Division 1;20 (b) money held on trust in relation to a different21 construction trust;22 (c) any other purpose that is not related to the23 construction trust for which the account was24 opened.25

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 22 page 28 76M. Requirements for construction trust accounts1 (1) The following requirements apply to a construction2 trust account opened under this Division —3 (a) the account must be a deposit or transaction4 account of the recognised financial institution;5 (b) the name of the account and the description of6 the account must include the words “trust7 account”.8 (2) The trustee of a construction trust must, as soon as9 practicable, give written notice of the account to —10 (a) each person who is or becomes a beneficiary of11 the trust; and12 (b) the contracting party for the trust contract.13 (3) The notice must contain the following information —14 (a) the name of the recognised financial institution15 with which the account has been opened;16 (b) the name of the account;17 (c) the BSB number and account number for the18 account;19 (d) that all construction payments for the trust20 contract are required to be paid into the21 account;22 (e) any other information prescribed by the23 regulations.24 (4) The trustee of a construction trust must give written25 notice of any change in the information contained in26 the notice, as soon as practicable after the change27 occurs, to —28 (a) each person who is a beneficiary of the trust;29 and30 (b) the contracting party for the trust contract.31

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 22 page 29 76N. Payments into construction trust accounts1 (1) A contracting party for a trust contract who has been2 notified of the establishment of a construction trust3 account by a trustee must make all construction4 payments for the trust contract into the account,5 including payments made in accordance with the6 following —7 (a) a determination of an adjudicator or review8 adjudicator under Part 3;9 (b) a decision of an arbitrator in any arbitration10 under the contract;11 (c) a decision of an expert appointed under the12 contract;13 (d) an order of a court or tribunal.14 (2) If an amount is paid, in contravention of subsection (1),15 into another account held by the trustee, the trustee16 must, within 24 hours of becoming aware of the17 payment, pay the same amount into the construction18 trust account.19 76O. Trustee to cover shortfalls20 (1) This section applies if there is an insufficient amount21 available in a construction trust account to pay an22 amount due and payable to a beneficiary of the trust on23 the day on which a construction payment for the trust24 contract is paid into the account.25 (2) The trustee must immediately deposit an amount equal26 to the difference between the amount available in the27 account for payment and the amount to be paid from28 the account.29

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 22 page 30 (3) This section does not apply to a trustee who is1 insolvent (as defined in the Building Services2 (Registration) Act 2011 section 63A(1)).3 76P. Restriction on withdrawals from construction trust4 accounts5 (1) A trustee must not withdraw money from a6 construction trust account other than in accordance7 with this section.8 (2) Money may be withdrawn from a construction trust9 account only as follows —10 (a) for the purpose of making a payment relating to11 a person’s beneficial interest in the construction12 trust;13 (b) for the purpose of withdrawing the money in14 accordance with section 76S(3);15 (c) in accordance with the determination of an16 adjudicator or review adjudicator under Part 3;17 (d) in accordance with a decision of an arbitrator;18 (e) in accordance with an order of a court or19 tribunal;20 (f) in accordance with a decision of an expert21 appointed to determine a matter under a trust22 contract in relation to which the account was23 established;24 (g) for the purpose of returning money paid into25 the account in error;26 (h) for the purpose of transferring money to27 another trust account opened in accordance28 with this Division;29 (i) for the purpose of withdrawing accrued interest30 in accordance with section 78(5);31

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 22 page 31 (j) for the purpose of exercising the right to an1 indemnity from the trust for the trustee’s2 expenses in administering the trust in the3 circumstances set out in —4 (i) if a direction of a kind prescribed by the5 regulations is obtained from a court —6 section 86(b) or (c); or7 (ii) section 86(a);8 (k) for any other purpose, or in any other9 circumstances, prescribed by the regulations.10 (3) For the purposes of subsection (2)(a), a payment relates11 to a person’s beneficial interest in the construction trust12 for a trust contract if the payment is made —13 (a) to the person in accordance with this Act; or14 (b) to repay an amount paid by the trustee of the15 construction trust to the person before the16 contracting party for the trust contract has paid17 the trustee.18 (4) Money may be withdrawn from a construction trust19 account only —20 (a) by cheque or electronic funds transfer; and21 (b) in accordance with any other requirements22 prescribed by the regulations, including23 requirements for notices of proposed24 withdrawals.25 (5) A trustee is taken to have withdrawn an amount from a26 construction trust account if —27 (a) the trustee authorises another person to make28 the withdrawal; or29 (b) the trustee knowingly contributes to the30 withdrawal being made.31

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 22 page 32 76Q. Amounts in construction trust account unavailable1 for trustee’s debts2 (1) An amount paid, or required to be paid, into a3 construction trust account held by a trustee must not4 be —5 (a) used to recover a debt owed to a creditor of the6 trustee; or7 (b) attached or taken in execution under a court8 order or process for the benefit of a creditor of9 the trustee.10 (2) Subsection (1) —11 (a) applies in relation to the trustee, whether in the12 capacity of trustee or otherwise; and13 (b) ceases to apply to an amount once lawfully14 withdrawn from the trust account; and15 (c) does not apply to the extent that it would16 interfere with the right of a beneficiary, other17 than a beneficiary who is also the trustee, under18 this Division.19 76R. Insufficient amounts available for beneficiary20 subcontractors21 (1) This section applies if —22 (a) a trustee of a construction trust is required to23 pay 2 or more other beneficiaries an amount24 from the construction trust account at the same25 time; and26 (b) the total amount held in the construction trust27 account is insufficient to satisfy the full amount28 required to be paid to each beneficiary; and29

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 22 page 33 (c) the trustee has not complied with its obligation1 to cover the insufficient amount; and2 (d) the trustee is a corporation under external3 administration (as defined in the Corporations4 Act 2001 (Cth) Schedule 2).5 (2) The trustee must, in accordance with the regulations,6 apply to a court for a direction in relation to the7 payment to the beneficiaries of the construction trust.8 (3) Nothing in this section relieves the trustee of the9 liability to pay in full the amounts the beneficiaries are10 entitled to be paid in connection with the trust contract.11 76S. Closure of construction trust accounts12 (1) A trustee may close a construction trust account —13 (a) for the purpose of transferring the account to14 another financial institution; or15 (b) if the construction trust is lawfully dissolved.16 (2) The trustee must, as soon as practicable after closing17 the account, give written notice of the closure to —18 (a) each former beneficiary of the trust; and19 (b) the contracting party for the trust contract.20 (3) In closing the account, the trustee may pay itself the21 following amounts —22 (a) any amount for interest that the trustee is23 entitled to under section 78;24 (b) any remaining amount that is not owing to25 another beneficiary of the trust.26 27

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 23 page 34 23. Part 4 Division 3 heading inserted1 Before section 77 insert:2 3 Division 3 — Obligations and restrictions relating to4 statutory trusts5 6 24. Section 77 amended7 (1) At the beginning of section 77 insert:8 9 (1) In this section —10 relevant matter means any of the following —11 (a) the amount of retention money required to be12 paid into, or withdrawn from, a retention13 money trust account;14 (b) the amount of a payment required to be paid15 into, or withdrawn from, a construction trust16 account;17 (c) the amount of a person’s construction payment18 entitlement in relation to a trust contract.19 20 (2) In section 77 delete “A decision on retention money that is21 required to be paid into, or that can be withdrawn from, a22 retention money trust account” and insert:23 24 (2) A decision on a relevant matter25 26 Note: The heading to amended section 77 is to read:27 Decisions on amounts of retention money, construction28 payments and construction payment entitlements29

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 25 page 35 25. Section 78 replaced1 Delete section 78 and insert:2 3 78. Trust account interest and fees4 (1) A trustee who holds money on trust in a trust account5 must not invest the money held on trust in any form of6 investment other than in accordance with this section.7 (2) Subject to subsections (3) and (4), the trustee is entitled8 to receive interest (the accrued interest) earned on the9 money held in the trust account.10 (3) Interest earned on money held in the trust account for a11 beneficiary of the trust is payable to the beneficiary if12 the interest is earned on the money after it has become13 payable to the beneficiary.14 (4) However, any interest payable to the beneficiary must15 be offset against any liability to pay interest to the16 beneficiary for late payment of the money.17 (5) The trustee may withdraw an amount equal to the18 trustee’s entitlement to the accrued interest —19 (a) once in each period prescribed by the20 regulations; and21 (b) at any time on or after —22 (i) for a retention money trust account —23 the retention money trust end date; or24 (ii) for a construction trust account — the25 dissolution of the trust.26 (6) The fees and charges payable to the recognised27 financial institution for the establishment and operation28 of a trust account are payable by the party who29 established the account.30 31

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 26 page 36 26. Section 79 amended1 After section 79(3) insert:2 3 (3A) A party to a construction contract who, without4 reasonable excuse, fails to comply with5 subsection (3)(a) commits an offence.6 Penalty for this subsection: a fine of $50 000.7 8 27. Section 83 deleted9 Delete section 83.10 28. Section 85A inserted11 After section 85 insert:12 13 85A. Effect of assignment of beneficial entitlements14 (1) An assignment by a subcontractor of the15 subcontractor’s entitlement to an amount arising under16 section 76I and held on trust under this Part is of no17 effect.18 (2) A trustee is not entitled to offset, against the19 subcontractor’s entitlement, any liability of the20 subcontractor under another contract.21 (3) If a trustee assigns any entitlement to recourse to22 money held on trust under this Part —23 (a) the money continues to be held on trust under24 this Part; and25 (b) this Act continues to apply to the assigned26 amount of money held on trust in the same way27 as it applied to the money before the28 assignment; and29

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 29 page 37 (c) the beneficial interest in the trust of any other1 party to the contract is not affected by the2 assignment.3 4 29. Section 86 amended5 (1) Delete section 86(b) and insert:6 7 (b) the trustee is a corporation under external8 administration (as defined in the Corporations9 Act 2001 (Cth) Schedule 2);10 11 (2) At the end of section 86 insert:12 13 Note for this section:14 The right to an indemnity from a trust permitted in the15 circumstances set out in paragraphs (b) and (c) is subject to16 certain requirements in relation to a construction trust — see17 section 76P(2)(j)(i).18 19 30. Section 87 deleted20 Delete section 87.21 31. Section 111 amended22 After section 111(2) insert:23 24 (3) Nothing in this section is taken to affect the operation25 of Part 3 Division 1A or Part 4 Division 2 in relation to26 a contract that expressly provides that a provision of27 either Division applies to the contract.28 29

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 32 page 38 32. Section 112A inserted1 After section 112 insert:2 3 112A. No liability against protected parties4 (1) In this section —5 protected party means any of the following —6 (a) the State;7 (b) the Minister and any other Minister of the8 State;9 (c) a State agency or GTE;10 (d) an employee of a State agency or GTE;11 (e) a person acting under the direction of a person12 referred to in paragraph (a), (b), (c) or (d),13 including an agent, contractor or advisor;14 relevant provision —15 (a) means section 14(3) or a provision of Part 316 Division 1A or Part 4; and17 (b) includes any subsidiary legislation made under,18 or for the purposes of, those provisions.19 (2) A protected party is not liable to any action, liability or20 demand arising (whether under a contract or otherwise)21 from the following —22 (a) the enactment, commencement or operation of23 a relevant provision;24 (b) the affecting of a liability by a relevant25 provision;26

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 33 page 39 (c) compliance, or purported compliance, in good1 faith, with a requirement of a relevant2 provision;3 (d) the doing of, or omitting to do, any other act,4 matter or thing, in good faith in the5 performance, or purported performance, of a6 function —7 (i) under a relevant provision; or8 (ii) under any other law relating to9 construction trusts; or10 (iii) in connection with a construction trust;11 (e) the exercise of any right under, or granted by, a12 relevant provision.13 (3) The State is also relieved of any liability arising from14 any other person doing, or omitting to do, anything15 described in subsection (2)(c) or (d).16 17 33. Section 114 amended18 (1) Before section 114(1) insert:19 20 (1A) In this section —21 agency and chief executive officer have the meanings22 given in the Public Sector Management Act 199423 section 3(1).24 25 (2) In section 114(2):26 (a) delete “published by the Building Commissioner”;27

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 34 page 40 (b) delete “the Building Commissioner directs when1 publishing the approved form that it is recommended but2 not mandatory.” and insert:3 4 specified otherwise in the approved form when it is5 published.6 7 (3) In section 114(3) delete “published by the Building8 Commissioner”.9 (4) After section 114(3) insert:10 11 (4) For the purposes of section 27C, the Building12 Commissioner may delegate the function under13 subsection (1) to the chief executive officer of any14 agency.15 (5) An approved form is taken not to be given in16 accordance with this Act if —17 (a) information in the form must be verified by a18 statutory declaration and is not; or19 (b) the form is required to be accompanied by a20 document and is not.21 22 34. Section 115 amended23 In section 115(1) delete “of this Act.” and insert:24 25 of this Act, other than Part 4 Divisions 2 and 3 (to the extent to26 which they relate to construction trusts).27 28

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 35 page 41 35. Part 6A inserted1 After section 120 insert:2 3 Part 6A — Transitional and savings provisions4 for Building and Construction Industry (Security5 of Payment) Amendment Act 20266 120A. Term used: amending Act7 In this Part —8 amending Act means the Building and Construction9 Industry (Security of Payment) Amendment Act 2026.10 120B. Interpretation Act 1984 not affected11 This Part applies in addition to the Interpretation12 Act 1984 and does not limit or otherwise affect the13 operation of the provisions of that Act.14 120C. Savings and transitional regulations15 Regulations made under section 119 may include16 provisions of a savings or transitional nature that arise17 as a result of the enactment of, or the coming into18 operation of, the amending Act.19 120D. Transitional arrangements for construction trusts20 (1) Section 14, as amended by the amending Act, extends21 to and in relation to a construction contract entered into22 before the day on which that amendment comes into23 operation.24 (2) Part 3 Division 1A, as inserted by the amending Act,25 does not apply to, or in relation to, a construction26 contract entered into before the day on which that27 Division comes into operation.28

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 2 Building and Construction Industry (Security of Payment) Act 2021 amended s. 35 page 42 (3) Part 4 Division 2, as inserted by the amending Act,1 does not apply to, or in relation to —2 (a) a construction contract entered into before the3 day on which that Division comes into4 operation; or5 (b) a construction contract entered into —6 (i) after the day on which that Division7 comes into operation; and8 (ii) in connection with a contract referred to9 in paragraph (a).10 (4) Despite subsection (3), regulations made under11 section 119 may provide that Part 4 Division 2, as12 inserted by the amending Act, applies to and in relation13 to a construction contract entered into before the day14 on which that Division comes into operation.15 120E. Transitional arrangements for adjudications and16 adjudication reviews17 (1) In this section —18 commencement day means the day on which the19 amending Act section 8 comes into operation;20 pre-commencement determination means —21 (a) an adjudicator’s determination made under22 section 38 before commencement day; or23 (b) a review adjudicator’s determination made24 under section 48 before commencement day;25 relevant former provision means any of the following26 provisions as in force immediately before27 commencement day —28 (a) section 30(2);29 (b) section 34(4);30

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Building and Construction Industry (Security of Payment) Act 2021 amended Part 2 s. 36 page 43 (c) section 42(3);1 (d) section 45(4).2 (2) A pre-commencement determination cannot be3 quashed or set aside on or after commencement day on4 the basis that a relevant former provision was not5 complied with or didn’t need to be complied with.6 (3) An adjudication application or adjudication review7 application made, but not yet determined, before8 commencement day, and any response given in relation9 to the application, are not invalid merely because a10 relevant former provision was not complied with.11 12 36. Various references to “retention money” deleted13 In the provisions listed in the Table delete “retention money”.14 Table15 s. 79(1), (2)(a), (3) and (5) s. 80(1) and (3) s. 81(1) s. 82(3) s. 85(3)

Building and Construction Industry (Security of Payment) Amendment Bill 2026 Part 3 Building Services (Registration) Act 2011 amended s. 37 page 44 Part 3 — Building Services (Registration) Act 20111 amended2 37. Act amended3 This Part amends the Building Services (Registration) Act 2011.4 38. Section 17 amended5 After section 17(2) insert:6 7 (3) In making a decision under this section, the Board may8 take into account events or matters occurring after the9 applicant applied for registration or renewal.10 11 39. Section 18 amended12 After section 18(2) insert:13 14 (3) In making a decision under this section, the Board may15 take into account events or matters occurring after the16 applicant applied for registration or renewal.17 18