Victorian Security of Payment reforms commence

The Victorian Government has now proclaimed key amendments to the Building and Construction Industry Security of Payment Act 2002 (Vic), with changes taking effect from 15 April 2026.

These reforms, as introduced by the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025 – represent the most significant overhaul of Victoria’s security of payment regime in nearly two decades.

What’s changing?

As covered in our earlier article – Living in a Claimant’s Paradise?: Major reforms to the Victorian Security of Payment Regime – Cornwalls, these amendments will reshape the operation of the existing regime, as they cover:

• Removal of ‘excluded amounts’ – expanding the scope of claims that can be pursued through adjudication;
• Greater flexibility in payment claims – including extended timeframes and simplified claim mechanisms;
• Restrictions on ‘new reasons’ in adjudication responses – increasing transparency in disputes and emphasising the importance of payment schedules which contained detailed reasons for withholding payment;
• New rights relating to performance security – including claims for the release of retention and bank guarantees and tighter rules around recourse to security including notices of intention to do so.  This will increase litigation and dispute in this area;
• Power to void unfair time-bar provisions – adjudicators and courts may disregard contractual notice provisions that are ‘unreasonably onerous’;
• Longer and more practical dispute resolution timeframes and increased adjudicator discretion; and
• Recognition of electronic service and clarification of business day calculations including a Christmas and New Year’s shut down period.

These changes are aimed at improving fairness, reducing technical barriers, and enhancing cash flow across the construction industry.

Importantly, many of these changes will apply broadly and with retrospectivity. Therefore, the new Act covers not just those construction contracts and agreements entered into after 15 April 2026.

What should industry participants be doing now?

With the new regime now in force:

• Review standard form and bespoke contracts for compliance;
• Reassess notice provisions and time bars;
• Update payment claim and contract administration processes including timing of payment; and
• Training for project teams on the expanded framework.

These reforms signal a clear policy direction, being to strengthen payment protections and reduce barriers to recovery.

If you would like to understand how these changes affect your projects, contracts or business, please feel free to get in touch with Richard Hutchings and Nik Reljic of Cornwalls.

Queries

Please contact the authors, or any member of our Building & Construction team, should you have any questions about this article, or if wish to discuss how we may be able to assist your business and/or projects.

Disclaimer

This information and the contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders, and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.