Key Takeaways
- Progress claims in Australian construction are formal payment requests for completed work or supplied materials under a building contract.
- The Building and Construction Industry Security of Payment Act (SOPA) sets strict rules for how and when progress claims can be made.
- A valid claim must name the contract, list the work done, and show the claimed amount with supporting detail.
- A payment schedule is the respondent’s written reply, showing what they’ll pay and why they might hold something back.
- The final progress claim wraps up the job, clearing any remaining balance once everything is signed off.
- Submitting progress claims properly and on time protects cash flow and avoids disputes between contractors and principals.
Cash flow is everything in construction – progress claims are what keep it moving. Contractors use them to get paid for the work already done instead of waiting until the very end. Without them, most construction businesses would stall halfway through a job.
What Is a Progress Claim in Australian Construction?
A progress claim is simply a written request for payment for the part of the job that’s finished. It might be a slab poured, framing complete, or materials delivered to site. The contractor totals up that portion, deducts anything already paid, and issues a claim for the rest. These claims usually come at stages set in the contract. The point is to turn work into money as the job rolls on.
The Legal Framework: SOPA and Construction Payment Claims
Every state has its own version of the Security of Payment Act. The names vary slightly but they all do the same thing, make sure people get paid for their work.
SOPA is a set of laws designed to make sure anyone doing construction work or supplying materials gets paid on time. The Act gives a legal right to claim payment for completed work and provides a fast way to resolve payment disputes through adjudication instead of court.
SOPA applies to most construction contracts in Australia, from large commercial projects to smaller subcontracting jobs. The main goal is to keep cash flowing and prevent bigger players from holding back money unfairly.
The Act says:
- You can make progress claims for completed work or supplied materials.
- The person receiving the claim must answer with a payment schedule within a set time.
- Disputes go to adjudication, not dragged through court.
Under the Act, if a builder sends a claim on the last day of the month, the client has ten to fifteen business days (depending on the territory) to reply. Miss that window and the claimant can take it straight to adjudication.
What Should be in a Progress Claim in Australia?
At minimum, a valid progress claim should include:
- Claimant’s name (or company name) and contact details.
- Respondent’s details (the party you are claiming from, e.g., principal contractor or client).
- A clear description of the work performed or the goods/supplies provided up to the claim date.
- The amount you consider to be due (calculated properly) and how that figure is arrived at.
- The reference date (if the contract or state legislation requires one) or the billing period.
- A statement that the payment claim is made under the applicable Security of Payment Act for your state (for example “This is a payment claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW)”).
- The date the claim is served to the respondent (this starts the timeline for the respondent’s response).
- If required by your contract or by state legislation (for example in NSW), a supporting statement that confirms any subcontractors have been paid or will be paid for the relevant work.
What Documents Are Needed for a Valid Progress Claim?
Beyond the bare minimum, you’ll want to attach or have ready supporting documents that show the claimed work or supply was legitimate, completed and aligned with the contract and any variations. Examples include:
- The contract (or subcontract) under which the work is done, including any variations or amendments.
- The project program or scope of works. This shows what was planned, and helps you link your claim to completed stages.
- A schedule of values (or similar breakdown) that shows how the total contract sum is divided into trade packages or work items, and what portion of each is now claimed.
- Evidence of work done: site diaries, photographs of progress, delivery/installation dockets, inspection reports, test results, material receipts. These avoid the claim turning into “we say we did it, you say you didn’t”.
- Correspondence or approvals for any variations, provisional items, or change orders. If you’re claiming an extra or variation item, you’ll want documented proof the change was authorised.
- If the claim is for stored materials (or goods on site awaiting installation), proof of ownership, storage arrangements and keeping risk of loss may be required.
- Proof of how the claim was served (email, registered post, document hand delivered with acknowledgement) because the claimant must show the respondent received the claim and triggered the statutory response time.
- If you are a head contractor (or principal) making the claim, you may need to show evidence that subcontractors (under you) have been paid, or that payment will be made. Failure to include this where required can render the claim invalid.
The Progress Claim Submission Process in Australia
The progress claim submission process in Australia looks similar across the country. The timing changes a little from state to state, but the flow stays the same.
- Prepare the claim. Get your paperwork right and make sure the figures add up.
- Submit it. Serve the claim how your contract says, often by email or direct delivery. The date served starts the clock.
- Wait for the payment schedule. The client has a fixed number of days to respond.
- Payment or adjudication. If payment doesn’t show or the amount is wrong, you can apply for adjudication under SOPA.
What’s the Difference Between a Progress Claim and an Invoice?
Progress claims and invoices might look similar, but they serve different purposes in construction. An invoice is a standard request for payment for goods or services. It sits under general contract law and doesn’t carry special legal weight beyond what’s in the contract itself.
A progress claim, on the other hand, is a formal payment request made under the Security of Payment Act (SOPA). It’s specific to construction work and comes with legal protections that make it enforceable even if there’s a dispute. A valid progress claim must clearly reference SOPA, describe the work done, and show how the claimed amount was calculated.
The Final Progress Claim in a Construction Project
The final claim in a construction project closes the loop. It’s usually made once practical completion is reached. Everything owed that hasn’t been claimed before goes into this one. Retentions and approved variations are wrapped up too.
Attach the completion certificate, defect list, and any required sign offs. Clear documentation helps the last payment land without delay.
What Is Progress Claims Finance?
Progress claims finance is a short term funding option built around approved or pending claims. It gives you access to cash tied up in unpaid claims so work keeps moving. Builders, subcontractors, and civil crews use it to pay suppliers and wages while waiting on scheduled payments. Think of it as an advance on what you’re already owed. When the client pays, the advance clears.
How It Works in Real Terms
Once you have an approved facility, you supply your invoice funding to the lender.. They verify the invoice and advance a portion of the scheduled amount, usually eighty percent of the invoice value. Once the client pays, the facility resets for the next round.
What Lenders Look For
They care about businesses performing work for Tier 1 & 2 contractors and government infrastructure including schools, hospitals, prisons and other government facilities.
Why Use It
- Keeps your business paid even when payments run slow.
- Lets you take on bigger work without draining reserves.
- Smooths cash flow between claim and payment.
- Gives breathing room to cover tax, materials, or retention costs.
Choosing Who To Work With
Find a finance partner that actually understands contracts and claim timing. Ask how they handle partial payments or disputes. Make sure you know what happens at completion and with retention money. A team like ours at Dark Horse Financial can structure something that fits your contract and your project program.
Final Thoughts
Progress claims keep the wheels turning in construction. They make sure cash moves as work gets done, not months later. Backed by the Security of Payment Act, they give contractors the power to demand fair, timely payment. Add progress claims finance and you’ve got a way to steady cash flow even when clients take their time.
Disclaimer: Loans and their accompanying benefits are available only to those who qualify for them and have been approved. Though we put a lot of care into writing this article, the information presented within is general and doesn’t consider your unique situation. It is not meant to serve as a substitute for professional advice, and you should not rely on it solely for any major financial decisions. You should always consult with a professional when you’re dealing with finance, tax, and accounting matters.
Talk to Dark Horse Financial
Need help setting up your progress claims or bridging the wait for payment? Contact Dark Horse Financial by sending in an enquiry. We can show you how to line up your claims, keep them compliant, and use finance to keep every project running without cash stress.
