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Security of Payment: How Australian Tradies Force Slow Payers to Pay

By Luke Tadich · The Tradie Owner

You've done the work. The client's happy enough with it. The invoice is sitting there, overdue, and every time you follow up you get "yeah mate, sorting it this week" and then nothing. You're not sure if it's worth a lawyer for the money owed, so you do what most tradies do — nothing, and just wear it.

Here's what most tradies don't know: you don't need a lawyer or a court date to force this. Every state and territory in Australia has security of payment legislation built specifically for construction work — it gives you a legal right to be paid, a formal process to claim it, and a fast adjudicator who can order the client to pay within weeks if they don't have a genuine reason to withhold it. It's one of the most underused tools in the trades, because almost nobody's ever shown a tradie how it actually works.

What the Act actually gives you

Security of payment law exists because construction has always had a payment problem — money flows down a chain of head contractor, builder, subbie, and every link can squeeze the one below it. Parliament's answer, in every state, was to give anyone who carries out construction work a statutory right to a progress payment, separate from whatever your contract says. You don't have to negotiate this right into your contract. It already applies to you by law, on top of your terms, whether the client likes it or not.

The exact rules differ a bit state to state — NSW, Queensland, Victoria and most of the east coast run a similar model; WA and the NT run a different one that's a bit more limited. Check the specifics for where you're working before you rely on a deadline, but the core mechanics below hold in every jurisdiction.

Step one: the payment claim

A payment claim is a specific legal document, not just an invoice with a stern tone. Done properly, it identifies the work, states the amount you say is owing, and references the Act. Get this part right and you've started a legal clock the other side can't just ignore.

• Identify the work clearly — the contract, the period, and exactly what the claim covers.
• State the claimed amount in plain dollars, matching your contract or a fair valuation of the work done.
• Say it's made under the Act — most states want this stated explicitly, in words close to the legislation's own, or the claim can be challenged later on a technicality.
• Send it properly — to the right entity, the right address, by a method your contract or the Act allows, and keep proof you sent it.

This is the step tradies get wrong most often, and it's worth ten minutes with your state's building commission website or a short call to a construction lawyer to get the wording right the first time — a defective claim can cost you the whole process, and you don't want to find that out on the one job where the money actually matters.

Step two: the payment schedule (or silence)

Once your claim lands, the other side has a set number of business days to respond with a payment schedule — a document saying what they'll pay and, if it's less than you claimed, exactly why. This is where the Act starts doing real work for you, because it flips the burden. They can't just go quiet and hope you give up.

1. They pay the full claim. Job done, no further process needed.
2. They respond with a payment schedule disputing some or all of it, with reasons — you can then take the disputed amount to adjudication.
3. They say nothing at all. In most states, silence past the deadline means they're taken to owe the full claimed amount — you can go straight to recovering it as a debt, or to adjudication, without them getting another chance to argue the value of the work.

That third scenario is the one that changes behaviour. A client who's used to "sorting it eventually" suddenly has a hard deadline with a real legal consequence for missing it. Plenty of slow payers pay up the moment a proper payment claim lands, purely because they now understand you know the process.

Step three: adjudication — your fast, cheap alternative to court

If they dispute the claim, you don't go to court — you go to adjudication, run through a nominated authorising body in your state. You lodge an adjudication application, they respond, and an independent adjudicator decides how much is actually owed. This typically runs in weeks, not the many months (or years) a court case can drag on for, and the fees are a fraction of litigation.

The adjudicator's decision is binding and enforceable — if they don't pay, you can register it as a court judgment and pursue it like any other debt, including against their assets. This is the part that gives the whole process teeth. A client who's happy to string out a phone call for months behaves very differently once there's a binding decision with real enforcement sitting behind it.

Use it as leverage, not just a last resort

The biggest mistake tradies make with security of payment law is treating it as the nuclear option, only worth pulling out when a job's already gone bad and the relationship's burnt anyway. Used earlier, it's the opposite — it's leverage that keeps relationships intact, because most disputes never make it past the payment claim stage once the other side realises you know what you're doing.

Build it into how you run every job over a decent size. Put clear progress claim milestones in your contract, send every claim referencing the Act as a matter of habit — not just when someone's already being difficult — and keep a simple template ready so it takes you ten minutes, not a stressed Sunday night. The tradies who never chase money for months aren't the ones with the best clients. They're the ones who make it clear, from the first invoice, that they know exactly how to get paid if it comes to that.