Subcontractor Didn’t Get Paid: Your Rights and Recovery Options in Australia

You finished the job. You submitted your invoice. The head contractor or principal has gone silent, made excuses, or flatly refused to pay. If you’re a subcontractor in Australia, you have specific statutory rights designed to get you paid fast.

This guide explains what to do when a subcontractor didn’t get paid in Australia, covering Security of Payment legislation, payment claims, adjudication, demand letters, and tribunal options.

Why subcontractors don’t get paid

Non-payment in the construction and building industry happens for several reasons:

• Cash flow problems — the head contractor is waiting on their own payment from the principal or developer
• Disputes over quality — the contractor claims defects or incomplete work, even when it’s finished to spec
• Contractual games — withholding retention, claiming set-offs, or inventing reasons to delay payment
• Insolvency — the head contractor is in financial trouble and prioritising other creditors
• Simple refusal — hoping you’ll give up or settle for less

Australian law gives subcontractors powerful tools to recover payment without going to court.

Security of Payment legislation — your statutory right to get paid

Every Australian state and territory has Security of Payment legislation designed specifically for the construction industry. These laws create a statutory right to progress payments and a fast adjudication process to resolve disputes.

State-by-state legislation:

• New South Wales — Building and Construction Industry Security of Payment Act 1999
• Victoria — Building and Construction Industry Security of Payment Act 2002
• Queensland — Building Industry Fairness (Security of Payment) Act 2017
• Western Australia — Building and Construction Industry (Security of Payment) Act 2021 (contracts made on or after 1 August 2022; earlier contracts stay under the Construction Contracts (Former Provisions) Act 2004)
• South Australia — Building and Construction Industry Security of Payment Act 2009
• Tasmania — Building and Construction Industry (Security of Payment) Act 2009
• Australian Capital Territory — Building and Construction Industry (Security of Payment) Act 2009
• Northern Territory — Construction Contracts (Security of Payments) Act 2004

All SOP Acts share the same core principle: if you’ve done the work, you have a right to be paid, and disputes can’t be used as an excuse to withhold payment indefinitely.

How to serve a payment claim under SOP legislation

A payment claim is a formal demand for payment under Security of Payment laws. It’s not just an invoice — it’s a statutory document that triggers strict timeframes and rights.

Requirements for a valid payment claim:

1. In writing — email is acceptable in most states
2. Identifies the construction work — describe what you did and when
3. States the amount claimed — must be a specific dollar figure
4. Claims payment under the SOP Act — include a statement like “This is a payment claim under the [State] Security of Payment Act”
5. Served on the correct party — the person or company who contracted you

What happens after you serve a payment claim:

• The respondent has typically 10–15 business days (depending on the state) to serve a payment schedule — a formal response stating how much they’ll pay and why
• If they serve a payment schedule offering less than you claimed, you can apply for adjudication
• If they don’t serve a payment schedule at all, the full amount becomes a debt due — you can sue for it or apply for adjudication

Adjudication is a fast, binding process where an independent adjudicator reviews the payment claim and payment schedule and makes a determination — usually within 10–20 business days. The determination is enforceable as a court judgment.

When to use a letter of demand instead

Security of Payment legislation only applies to construction work under a construction contract. If your situation doesn’t fit — for example, you’re a consultant, designer, or supplier of materials only — or if the SOP timeframes have passed, a letter of demand is your next option.

A letter of demand:

• Formally demands payment within a specified timeframe (usually 7–14 days)
• Cites the contract or breach of contract principles
• Warns of further action (tribunal application, court proceedings, or statutory demand)
• Creates a paper trail showing you tried to resolve the matter before escalating

When a letter of demand is appropriate:

• Your work doesn’t qualify as “construction work” under SOP legislation
• You’ve missed the SOP timeframes
• The debt is under the small claims threshold and you want to avoid adjudication costs
• You want to give the other party one final chance to pay before filing

Claim Done’s Programmatic Algorithms draft a letter of demand citing the applicable law, format it professionally, and deliver it by email to the debtor — all for a flat fee.

Tribunal and court pathways for unpaid subcontractors

If a payment claim or letter of demand doesn’t result in payment, you can file a claim in the civil tribunal or court that hears money claims in your state. In New South Wales, a business owed money has a debt claim for the Local Court of New South Wales, not NCAT: NCAT hears consumer claims, which are brought by the consumer. Small claims processes don’t require a lawyer.

State thresholds for money claims:

• New South Wales — Local Court of New South Wales, not NCAT: Small Claims Division up to $20,000; General Division over $20,000 up to $100,000
• Victoria — VCAT, Civil Claims List
• Queensland — QCAT, minor civil dispute, up to $25,000
• Western Australia — Magistrates Court of Western Australia, minor case claims up to $10,000; general procedure claims up to $75,000
• South Australia — Magistrates Court of South Australia, minor civil action up to $12,000; general claims up to $100,000
• Tasmania — Magistrates Court of Tasmania (Civil Division), up to $50,000
• Australian Capital Territory — ACAT, civil disputes up to $25,000
• Northern Territory — NTCAT, small claims up to $25,000

What you’ll need to file:

• Completed application form (in New South Wales, a Local Court statement of claim)
• Copy of the contract (if written) or evidence of the agreement (emails, quotes, scope of work)
• Invoices and payment claim
• Evidence of work completed (photos, timesheets, delivery dockets, site records)
• Proof the debt is overdue (payment claim, letter of demand, unanswered emails)

Filing fees change each 1 July; check the current fee on the tribunal’s or court’s website before you file.

Statutory demand — the nuclear option for debts over $4,000

If the debt is $4,000 or more and the debtor is a registered company (Pty Ltd or Ltd), you can serve a statutory demand under the Corporations Act.

A statutory demand gives the company 21 days to pay the debt in full or face presumption of insolvency — which can lead to wind-up proceedings.

Why it works:

• Directors take it seriously because it threatens the company’s existence
• The company must either pay, apply to set aside the demand (expensive and difficult), or risk being wound up
• You don’t need a court judgment first — the debt just needs to be due and payable

Risks:

• If the company successfully applies to set aside the demand, you may be ordered to pay their legal costs
• Only use it if the debt is genuinely undisputed and you have clear evidence

Claim Done prepares Form 509H and the supporting affidavit template for $97 — you file and serve it yourself.

Retention money — your rights as a subcontractor

Many construction contracts allow the head contractor to withhold a percentage of each progress payment as retention — typically 5–10% — to cover defects or incomplete work.

Your rights to retention money:

• Retention must be released according to the contract terms (usually at practical completion or after a defects liability period)
• Some states require retention to be held in trust under certain contracts
• If the head contractor goes insolvent, trust requirements can protect your retention from being claimed by other creditors
• You can claim retention as part of a payment claim or demand letter once the release date has passed

If retention is being wrongfully withheld, treat it the same as any other unpaid invoice — issue a payment claim or letter of demand, then escalate to adjudication or tribunal if necessary.

What to do right now if you haven’t been paid

Step 1: Check your contract and the SOP Act timeframes

• Does your contract specify payment terms?
• Is your work covered by Security of Payment legislation?
• Are you still within the timeframe to serve a payment claim?

Step 2: Serve a payment claim (if applicable) or letter of demand

• If you’re within SOP timeframes and doing construction work, serve a payment claim immediately
• If not, send a letter of demand citing the contract or breach of contract

Step 3: Wait for the response

• Payment claim: typically 10–15 business days for a payment schedule
• Letter of demand: 7–14 days (whatever deadline you set)

Step 4: Escalate if they don’t pay

• Payment claim: apply for adjudication or sue for the debt
• Letter of demand: file a tribunal or court claim or serve a statutory demand (if over $4,000 and debtor is a company)

Step 5: Enforce the judgment

• If you win at the tribunal, in court or at adjudication, enforce the judgment through garnishee orders, writs of execution, or bankruptcy/wind-up proceedings if they still don’t pay

How Claim Done helps subcontractors recover unpaid invoices

Claim Done’s Programmatic Algorithms work from what you tell us about your evidence — contracts, invoices, emails, photos — and generate the legal-style document you need to recover what you’re owed.

For unpaid subcontractors, we offer:

• Letter of demand — drafted by our Programmatic Algorithms, citing the applicable law, delivered by email ($49)
• Statutory demand — Form 509H and affidavit template for debts over $4,000 owed by a company ($97)
• Tribunal application pack — your application and a witness statement ($97; for a New South Wales debt, Claim Done’s Tribunal Application drafts a Local Court statement of claim)

No subscription. No hourly fees. No lawyer required for straightforward debt recovery.

But for simple “I did the work, they didn’t pay” situations, Claim Done gets you the documents you need to take action fast.

Take action now

The construction industry relies on cash flow. Every day you wait is another day the debtor has your money. Serve a payment claim if you’re within SOP timeframes, or get your letter of demand drafted and sent automatically for $49. If the debt is over $4,000 and owed by a company, prepare a statutory demand for $97. For tribunal matters, Claim Done prepares your tribunal application pack for your state.

Stop waiting. Start recovering.

Frequently Asked Questions

Can I serve a payment claim if I don't have a written contract?

Yes. Security of Payment legislation applies to construction contracts whether they’re written, oral, or implied. You’ll need evidence of the agreement (emails, quotes, text messages) and proof you did the work (photos, timesheets, delivery dockets).

What happens if the head contractor ignores my payment claim?

If they don’t serve a payment schedule within the statutory timeframe (typically 10–15 business days depending on your state), the full amount of your payment claim becomes a debt due. You can sue for it as a debt or apply for adjudication to get a binding determination.

How long does adjudication take under Security of Payment laws?

Adjudication is designed to be fast — usually 10–20 business days from the date you lodge your adjudication application. The adjudicator’s determination is binding and enforceable as a court judgment.

Can I claim retention money if the head contractor hasn't released it?

Yes. If the contract says retention is due at practical completion or after a defects liability period, and that date has passed, you can claim it as part of a payment claim or letter of demand. Some states require retention to be held in trust, which can protect your money if the head contractor becomes insolvent.

Do I need a lawyer to recover unpaid subcontractor invoices?

Not for straightforward debt recovery. Security of Payment adjudication, letters of demand, and tribunal applications are all designed to be accessible without a lawyer. Claim Done generates the legal-style documents you need.