Responding to a payment claim
If you receive a payment claim under the SOP Act, you may respond to a payment claim in one of two ways:
- If you agree with the payment claim, pay the amount claimed in full, on or before the due date.
- If you do not agree to pay the full amount by the due date, give the claimant a payment schedule within 10 business days (or sooner, if the contract sets a shorter deadline) setting out what you are willing to pay and why it is different from the amount claimed.
If you fail to do either of those things, the claimant may apply for adjudication or apply to a court to enforce payment. The claimant may also suspend work or the supply of goods and services under the contract until payment is made.
A ‘paid when paid’ provision in a construction contract has no effect. You cannot delay paying a payment claim because you are waiting to be paid by someone else under another contract.
Making a payment schedule
A payment schedule is a reply to a payment claim when you do not agree to pay the amount claimed by the due date. It states how much you will pay the claimant and why.
Download a sample payment schedule form (PDF, 364.63 KB).
The payment schedule must:
- identify the payment claim to which the payment schedule relates
- identify the amount (if any) that the respondent proposes to pay ('the scheduled amount')
- provide any reason why the scheduled amount is less than the claimed amount, including any reason why the respondent may be withholding payment
- identify any amount of the claim that the respondent alleges is an excluded amount.
The following amounts cannot be included in a payment claim – they are 'excluded amounts':
- Any amount that relates to a variation of the construction contract that is not a claimable variation.
- Any amount (other than a claimable variation) claimed under the construction contract for compensation due to the happening of an event, including any amount relating to latent conditions, time related costs and changes in regulatory requirements.
- Any amount claimed for damages for breach of the construction contract or for any other claim for damages arising under or in connection with the contract.
- Any amount in relation to a claim arising at law other than under the construction contract.
The payment schedule must identify any amount in the payment claim that the respondent believes is an excluded amount.
You have 10 days after receiving the payment claim to serve the payment schedule on the claimant, unless the contract allows less time.
The 10-day deadline refers to when the payment schedule must be ‘served’. How it is served determines when it is served. It may be served in any of the following ways:
- deliver it in person – it is served when the claimant receives it
- lodge it during business hours at the claimant’s ordinary place of business – it is served when it is received at that address
- send it by post to the claimant's ordinary place of business – it is served two business days after the day it is posted
- fax it to the claimant's ordinary place of business – it is served at the time it is received unless it is received after 4 pm; if it is received after 4 pm, it is taken to have been served on the next business day
- provide it in any other manner specified in the contract.
If you miss the deadline, you become liable to pay the full amount claimed. The claimant can apply to the court to enforce payment or apply for adjudication.
Failure to pay or provide a payment schedule
If you do not provide a payment schedule and don’t pay on time, the claimant can go to court to enforce payment as a debt or apply for adjudication. The claimant may also suspend work or the supply of goods and services under the contract until payment is made. For more information on the actions a claimant can make, see Options if a respondent doesn’t pay or respond.
If you fail to provide a payment schedule in response to a payment claim, the claimant must give you written notice of their intention to apply for adjudication before applying for adjudication. You then have two business days to provide a payment schedule. The adjudication may still proceed whether you do or do not provide a payment schedule within two business days.
If the claimant applies for adjudication, a respondent who has not provided a payment schedule may not submit an adjudication response or apply for a review of the adjudicator’s determination.