What Constitutes a Valid Payment Claim?
You can make a payment claim to receive anything that is owed to you for construction work or goods and services you have provided under the terms of a contract or within the last 12 months (whichever is the later).
Section 13 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act) (and relevant security of payment legislations in other states and territories), governs what a payment claim must include. Typically, provided you have complied with the Act, a regular monthly invoice will qualify as being also a statutory payment claim under the Act.
What must my invoice include to also be a payment claim under the Act?
For contracts entered in after 21 October 2019, a payment claim must:
- clearly identify or describe the construction work or related goods and services to which the progress claim relates to; and
- state the amount of the progress payment which is due inclusive of GST known as the claimed amount and if possible identify how the sum claimed was calculated; and
- contain the endorsement: “This is a payment claim made under the NSW Building and Construction Industry Security of Payment Act 1999 (NSW)”; and
- clearly identify the name and details of the Respondent that the claimant contracted with (including the ACN/ABN details)
For contracts entered before 21 October 2019, the checklist is similar except for the requirement to state that the claim is made under the Act.
Section 7 of the Act provides that a head contractor must serve a payment claim on the principal with supporting statement indicating that it relates to that payment claim. Payment claims made may also include relevant attachments for the Respondents reference such as:
- statements detailing the extent of the work completed and/or goods & services supplied as at the date of the payment claim;
- completion certificates;
- delivery dockets;
- photographs; and
- other contract documentation required under the contract.
A payment claim can only be issued once per month. The time for issuing a claim is either the date provided for in the contract (for example, the “25th of the month”) or if the contract doesn’t specify a date, the last day of the month. A claim issued early will be invalid, however a claim issued after the relevant date has arisen (for example, the 25th of the month) will be valid provided it doesn’t try to claim for work that was performed after that date.
A progress claim must be made within 12 months from the last day the construction work was last carried out or when the related goods and services was last supplied, unless stated otherwise in the construction contract. In the case of a construction contract that has been terminated, only one payment claim may be served after date of termination.
Multiple payment claims can’t be made in relation to the same month. However, if a previous month’s payment claim remains unpaid, it can be included in a fresh month’s payment claim.
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