On 11 September 2025, the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Bill 2025 (the Bill) which proposes to amend the Building and Construction Industry Security of Payment Act 2002 (the Act) had its second reading in Victoria’s Legislative Assembly.

If passed, the Bill will come into effect on 1 September 2026 (or on an earlier date to be proclaimed) and will apply retrospectively to construction contracts on foot, with certain exceptions, including adjudication applications or payments claims which have been served under the Act.

The Bill introduces a number of significant changes to the Act, including:

• Excluded amounts: removing the ‘excluded amounts’ regime which is exclusive to Victoria, and which prevents payment claims being made in respect of (among other things) time-related costs, latent conditions, disputed variations, changes to regulatory requirements and damages for breach of contract;
• Reference dates: removing the concept of ‘reference dates’ and allowing claimants to serve a payment claim on and from the last day of the month during which construction work was carried out;
• Payment schedule: prohibiting a respondent from providing new reasons for non-payment in an adjudication response not previously raised in its payment schedule;
• Timing of payment claims: extending the timeframe to make a payment claim to six months after practical completion of construction work;
• Timing of payment: imposing a 20 business day limit for the payment of progress payments, and deeming any contractual provisions seeking to extend this timeframe void;
• Notice-based time bars: permitting adjudicators and courts, as well as arbitrators and experts appointed under a contract, to declare notice-based time bar provisions as unfair and void;
• Blackout period: imposing a ‘Christmas blackout’ during the customary industry shutdown period between 22 December to 10 January of each year;
• ‘Pay when paid’ provisions: broadening the ‘pay when paid’ restrictions which limit the effect of provisions in construction contracts that make payment contingent on other events; and
• Performance security: introducing a statutory right to claim for the release of performance security (including a performance bond or retention money) in an adjudication, and imposing a notice requirement before a party has recourse to security.

The Bill also outlines proposed amendments to the Building Act 1993 regarding building surveyor and building inspector registration reforms and planning related amendments to the Planning and Environment Act 1987, Heritage Act 2017 and the Environment Effects Act 1978.

If passed, the proposed changes will significantly broaden the scope of the Victorian security of payment regime and seek to align it with other jurisdictions, including New South Wales and Western Australia.

A full version of the Bill can be found here.