At Level Playing Field we are extremely excited about 2025! After 19 long years, the Victorian Security of Payment Laws will finally be amended.
We started preparing adjudication applications in 2012. Having worked as head contractors and subcontractors, we had big dreams about this piece of legislation – to increase accessibility for Victorian contractors and resolve disputes.
The implications of non-payment for legitimate claims for construction work include:
- Businesses exiting the market/insolvency.
- Delayed projects.
- Increased construction costs.
- Increased construction defects.
What do you need to know?
- Tranche 1 reforms are currently being drafted and scheduled to take effect in 2025.
- Tranche 2 reforms are being debated and discussed in a reference group led by the Department of Transport Victoria.
What are the Tranche 1 Reforms about?
1. Disputed variations on contracts over $5 million will now fall under Security of Payment legislation.
2. Time-Related Costs will be claimable under the legislation.
3. Enhanced Access to Security of Payment laws for all participants.
What are the Tranche 2 Reforms about?
- Retention Trust Scheme to protect subcontractors and contractors' retention funds against insolvent head contractors and principals/developers. This already exists in NSW.
- Cascading Deemed Statutory Trust Scheme to secure ALL payments (progress and final claims) throughout the construction chain.
What Can You Do to Prepare?
The Security of Payment legislation balances freedom of contract with protections for subcontractors. As more claims fall under its scope, contracts will be scrutinized more than ever.
Here’s how you can prepare:
✅ Review Your Scope of Works – Are you confident it means what you think it does?
✅ Avoid Liquidated Damages – Understand the importance of valid extension of time
notices and create project-specific templates. Previously, these were ‘Excluded Amounts’ that
could not be raised in a Security of Payments claim.
✅ Optimise Contract Management – Learn how to comply with your contracts effectively
and avoid disputes.
✅ Resolve issues DURING the Project – Resolve issues progressively to avoid a dispute at the end
of the Project when your options are limited and extremely expensive.
Stay Informed
Level Playing Field is part of the reference group for Tranche 2 reforms run by Victoria’s Department of Transport. As we did in our parliamentary submission on behalf of key industry groups, including Master Plumbers, the Crane Industry Council of Australia, Structural Steel Fabricator’s Association and the Civil Contractor’s Federation, we will advocate for solutions that improve the construction industry and project delivery.
Stay informed by joining our mailing list!