Security Of Payment Act NSW 2014 Amendments
The Security Of Payment Act NSW was amended in 2013 and the amendments came into force on 21 April 2014.
The amendments are:
- Endorsement no longer required on payment claims.
- Default payment terms increased.
- Supporting Statement for Head Contractor claims now mandatory.
The amendments had an impact straight up.
The modification of the requirement for a payment claim made under the Security Of Payment Act NSW to no longer require an endorsement stating that it is a payment claim made under the Building & Construction Industry Security of Payment Act 1999 now means that every invoice is potentially a payment claim made under the Building & Construction Industry Security of Payment Act 1999.
What does this mean in all practicality?
It means that if you serve an invoice for work carried out then you have started the timeline of the Security Of Payment Act NSW process running. So it is critical that your invoice is a solid claim and that you follow through on it properly and within the time allowed.
Unfortunately the change to the time for payment is good in one respect but not another.
The change to the time for payment is good in the sense that it limits time for payment for subcontractors to 30 business days. This is good because some subcontractors were forced to enter into agreements before this change that included payment terms that dragged out for months.
But unfortunately now, if there is no agreed terms then the default which is 30 business days now applies, where previously it was 10 business days before the amendments.
Lastly the mandatory requirement for a supporting statement to accompany a payment claim served by a head contractor is a tricky one. All claimants should be on notice of the importance of handling this one properly.
First of all, make sure you understand if you are or aren’t a head contractor or not.
Next make sure if you are a head contractor that you are up to date on subcontractor payments and that you complete the supporting statement properly and include it at the time of serving your invoice / payment claim.