Building and Construction Industry (Security of Payment) Amendment
Bill 2026
Building and Construction Industry (Security of Payment)
Act 2021 amended
Part 2
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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
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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
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Act 2021 amended
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(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
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(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
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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
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(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
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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
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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
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Bill 2026
Part 2 Building and Construction Industry (Security of Payment)
Act 2021 amended
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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
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(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
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Act 2021 amended
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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
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Act 2021 amended
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(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