Reforms to the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Bill 2025

The Victorian Government introduced the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Bill 2025 (the Bill) on 11 September 2025 in the wake of a major parliamentary inquiry into payment practices in the construction industry.

The Bill follows extensive industry consultation and stems from the Victorian Parliamentary Committee Inquiry into payment practices in the construction industry. The Government accepted 28 of the Inquiry’s recommendations, with implementation occurring in two stages. Sixteen of those recommendations are being addressed through this first tranche of reforms. Together, these changes represent a significant overhaul of the Building and Construction Industry Security of Payment Act 2002 (Vic) (SOP Act), with several key amendments outlined below.

1.Removing the “excluded amounts” regime. Currently under the SOP Act, certain categories of claims are excluded from the fast-payment regime (for example contested variations, delay costs, latent conditions). The Bill proposes to repeal those exclusions so that claimants can include those contested items in a payment claim under the SOP Act.

2.Removing the “reference date” concept; monthly claim entitlement. The Bill abolishes the concept of “reference dates” (which were the triggers under the current SOP Act for when a payment claim could be served). Instead, the Bill provides for an entitlement to serve one payment claim per calendar month.

3.“Blackout period” for Christmas. The Bill introduces a “summer blackout” (in Victoria’s case) between 22 December and 10 January each year, during which enforcement and adjudication timeframes under the SOP Act will be suspended.

4.Long-stop limit on payment claims (six months). The Bill proposes that a claimant must make a payment claim within six months of performing the relevant construction work or supplying the related goods and services and respondents have to pay 20 business days, not the 25 recommended by the committee.

The Bill is drafted to come into operation on a date to be announced, but no later than 1 September 2026. Importantly, the amendments will apply retrospectively to construction contracts entered into before the commencement date (with some exceptions, for example where a payment claim has already been served or adjudication initiated).

What does this mean for subcontractors, contractor and respondents. The reforms are largely favourable for subcontractors as they make it easier to make claims, broader scope of claimable items and more time to submit claims. As for contractors and respondents, the removal of “excluded amounts” and reference dates mean potential for greater exposure to payment claims and adjudications.

In effect, the Bill aligns Victoria’s security of payment regime more closely with the regimes in other jurisdictions (for example in NSW and WA) by removing certain uniquely Victorian features and simplifying aspects of the process. If the Bill is enacted as proposed, it reshapes the landscape of payment claims and disputes under the security of payment regime.