The Queensland Government has just announced that the implementation of the next phases of the Project Trust Account framework, originally scheduled to be rolled out between 1 March 2021 and 1 October 2023, will be delayed.
What has happened?
In recognition of the need to balance continued protections for tradies with a suitable software solution for smaller builders feeling the strain, the Queensland Government has extended the commencement of the remaining phases of the Project Trust Account framework.
This will extend the commencement date for eligible contracts for up to two years. The requirements for a project trust account for:
- contracts between $3 million and $10 million has been pushed back from 1 April 2023 to 1 March 2025; and
- contracts over $1 million has been pushed back from 1 October 2023 to 1 October 2025.
The new framework was designed to strengthen the security of payments to subcontractors in Queensland and will impact how head contractors operate. It includes changes to the trust account requirements, with a project trust account required for specified building contracts and a separate retention trust account required for the holding of cash retentions. The Queensland Government has recognised that these changes may result in an increased administrative burden for contractors due to new software and compliance requirements. Queensland is so far the only jurisdiction that has reformed their framework to this extent.
What this means for you
The extension means that contracts $3 million to $10 million executed prior to 1 March 2025 and over $1 million executed prior to 1 October 2025 will not be caught by the new Project Trust Account framework. The framework is already in effect for contracts valued at $10 million or more and State Government Hospital and Health Service contracts valued at $1 million or more.
If you have any questions regarding the roll out of project trust accounts, please contact CDI Lawyers.
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