Victoria's Security of Payment Reset: What the April 2026 Reforms Mean for Your Next Claim

For twenty years, Victoria ran the least useful security of payment regime in Australia — by design. The "excluded amounts" rules stripped out precisely what contractors actually dispute: delay costs, latent conditions, disputed variations, damages. Adjudication volumes ran far below New South Wales and Queensland because the Act could not carry the claims that mattered. That era ended on 15 April 2026, when the Building Legislation Amendment (Fairer Payments on Jobsites and Other Matters) Act 2025 (Vic) commenced — and because it reaches contracts already on foot, every commercial team with Victorian work needs to re-learn the regime now, not at the next dispute.

What the old regime did

Under the former ss 10A and 10B of the Building and Construction Industry Security of Payment Act 2002 (Vic), payment claims could not include "excluded amounts": time-related costs such as delay damages and EOT costs, compensation for latent conditions, costs of regulatory change, or damages claims. Variations were claimable only within the convoluted "claimable variations" classes — with disputed variations effectively barred on most larger contracts once thresholds and anti-avoidance rules engaged. Adjudicators could not award excluded amounts, and determinations that strayed risked review under Victoria's unique (and now repealed) limited review mechanism. The practical result: Victorian adjudication was narrow, technical, jurisdictionally fragile, and avoided.

What changed on 15 April 2026

Excluded amounts and claimable variations are abolished. Sections 10A and 10B are repealed. Delay and disruption costs, latent conditions compensation, regulatory-change costs, disputed variations and damages claims can now travel through payment claims and adjudication — aligning Victoria with the east-coast model.

Reference dates are gone; entitlement is monthly. A claimant may serve one payment claim per month, on and from the last day of the month in which work was first carried out and each month after. Claims after termination are permitted, and a prematurely served claim is no longer invalid — it is deemed served on the earliest valid date.

Payment terms are capped at 20 business days. The due date remains as the contract provides (default 10 business days if silent), but any term allowing payment later than 20 business days after service of the claim is void — a flat cap at every contract tier.

The final claim window doubled. Payment claims can be served up to the later of the contractual date or six months after practical completion (or final supply).

Unfair notice-based time bars can be set aside — s 13A. A provision making entitlement to payment, an EOT or release of performance security contingent on notice may be declared unfair — and of no effect in the particular case — where compliance "is not reasonably possible or would be unreasonably onerous". The declaration can be made by an adjudicator, a court, an arbitrator or an expert determiner in proceedings under the Act's orbit. The factors include when the party would reasonably have become aware of the deadline, the notice mechanics, relative bargaining power, and whether non-compliance produces final and binding consequences. The burden sits on the party alleging unfairness — this is a safety valve, not a repeal of notice discipline.

Performance security has a statutory regime — ss 17A–17H. Claimants can serve a "performance security claim" for retention and security, with progress-claim-equivalent rights: payment schedule machinery, adjudication, judgment. Where the contract is silent on release, security must be released within 10 business days after service of the claim. And recourse to security now requires written notice of intention at least 5 business days beforehand, identifying the contract, basis, amount and circumstances — a provision that cannot be contracted out and that converts the "midnight bond call" into a contested, reviewable step.

The calendar pauses for the shutdown. "Business day" now excludes 22 December to 10 January, aligning Victoria with Queensland and stopping the old trick of serving claims into the industry shutdown.

Respondents are locked to their schedules. Reasons for withholding not raised in the payment schedule cannot be raised in the adjudication response — Victoria now matches the NSW s 20(2B) discipline — and the "second chance" schedule window after an adjudication notice runs at 5 business days.

The retrospective bite

The amendments apply to all construction contracts, including those entered before 15 April 2026. The payment claim and adjudication changes apply to claims served on or after that date, even under old contracts; the time-bar and performance-security provisions bite on existing contracts and security already held. There is no grandfathering to hide behind: the contract you signed in 2023 is now administered under the new rules.

What this means in practice

1. Claimants: re-scope what you can claim. Delay costs, disruption, latent conditions and disputed variations that were unclaimable in Victorian adjudication are now in. Live claims previously parked for litigation deserve a fresh look through the adjudication lens — with the evidence discipline (records, causation, quantum build-up) that fast-track determination demands.
2. Respondents: payment schedule discipline is now existential in Victoria too. Every withholding reason, in the schedule, on time, particularised. The NSW playbook — 48-hour triage, line-by-line reconciliation, categorised deductions — applies verbatim from April 2026.
3. Audit your contract suite. Three immediate checks: payment terms longer than 20 business days (now void), notice-based time bars vulnerable to s 13A (tighten the reasonableness of your regimes — generous, workable notice periods are now more enforceable than brutal ones), and security/recourse clauses against ss 17A–17H mechanics.
4. Update the December calendar. The 22 December–10 January pause changes every deadline calculation over summer — and removes both the shutdown ambush and the shutdown excuse.
5. Principals: rehearse the new recourse sequence. Five business days' notice before touching security gives contractors time to injunct or adjudicate. The merits case for any call must be built before the notice goes — and the EnerMech lesson from NSW about claw-back via payment claims now has a statutory Victorian cousin.

Key takeaways

• From 15 April 2026, Victoria's excluded amounts and claimable variations regimes are abolished — delay costs, latent conditions and disputed variations are adjudicable.
• Monthly claim entitlement, a void-above-20-business-day payment cap, six-month final claim window, and a 22 Dec–10 Jan timeframe pause.
• s 13A lets adjudicators, courts, arbitrators and expert determiners disregard unfair notice-based time bars in the particular case.
• Statutory performance security claims and a mandatory 5-business-day notice before recourse to security (ss 17A–17H).
• It applies to existing contracts — audit payment terms, time bars and security clauses now.

This article is general information only and is not legal advice. For advice on a specific contract or dispute, seek legal counsel or contact Sumit Consulting for commercial and claims advisory support.