Unpaid Subcontractor: How to Recover Your Money in Australia

You did the work, issued the invoice, and now the head contractor or principal has gone silent — or is feeding you excuses while the cash sits in their account. Australian subcontractors have stronger statutory protection than most realise, but only if the right steps are taken in the right order.

The two parallel paths

Subcontractors in construction (and a number of related industries) get a unique advantage: each state has a Security of Payment Act that creates a fast-track adjudication process bypassing courts and tribunals. In New South Wales, Victoria, Queensland, Western Australia, South Australia, the Australian Capital Territory and Tasmania the regime is broadly similar:

• Issue a payment claim that complies with the relevant Act
• If the principal does not respond with a payment schedule in time, the full claim becomes payable as a debt
• If they do schedule less, you can lodge for adjudication — typically resolved in 10–25 business days
• Adjudicated amounts are enforceable as a court judgment

The Northern Territory works differently: there is no payment schedule, and if a payment claim is rejected, disputed or not paid in full when due, you have 65 working days from then to apply for adjudication.

For non-construction subcontractor work — IT, professional services, manufacturing — the path is the standard Letter of Demand followed by tribunal or court action.

Where the Act applies, serve a payment claim first

Where a Security of Payment Act applies, its deadlines run from a payment claim that complies with that Act, so serve the payment claim first. For other work, a properly drafted Letter of Demand:

• References the contract or purchase order
• Identifies the unpaid invoice(s) and the work delivered
• Sets a clear deadline (typically 14 days)
• Names the next step — Security of Payment claim, statutory demand, tribunal or court
• Establishes the documented record needed for any escalation

The Australian Consumer Law angle

Misleading conduct, unconscionable conduct and unfair contract terms claims are available where the head contractor has misled you about payment, retention, or scope.

The statutory demand option (companies only)

If the debtor is a company and owes more than $4,000, a Creditor’s Statutory Demand under the Corporations Act gives them 21 days to pay or face a presumption of insolvency. It suits an undisputed company debt, but not one the company genuinely disputes. Best used after the Letter of Demand is ignored.

What Claim Done’s Letter of Demand covers

• The contract or purchase order details
• The unpaid invoice(s) with dates and amounts
• Reference to relevant Security of Payment regime where applicable
• A 14-day deadline
• The escalation pathway — adjudication, statutory demand, tribunal or court
• Sent on professional letterhead to the head contractor or principal

The flat fee

The wizard asks about the contract, the work, the invoice and the response so far. If they do not, the same dashboard escalates to Final Demand ($49), Statutory Demand ($97) or tribunal application ($97).

Next step

Where a Security of Payment Act applies, serve the payment claim first; for other work, send the Letter of Demand. The longer an unpaid invoice sits, the harder it is to recover — particularly if the head contractor is heading for insolvency.