Claimed Amount in Cost Plus Payment Claims
⚠️ Compliance Warning
Failing to clearly state the claimed amount is a primary reason for claim invalidity. An ambiguous or incorrect amount can render your entire claim unenforceable under the Security of Payment Act.
1. What is the Claimed Amount?
The Claimed Amount is the total sum being claimed in Australian Dollars that you, as a contractor or builder, assert is due for payment under a construction contract. This field appears prominently on a NSW Payment Claim as it represents the fundamental financial component of your claim.
This field is a mandatory statutory requirement under the Building and Construction Industry Security of Payment Act 1999 NSW (the "Act"). It clearly communicates to the respondent (the party who must pay) exactly how much you are claiming, enabling them to understand their potential financial obligation and respond appropriately with a payment schedule.
2. Legal Requirements
Relevant Sections of the Act
Section 13(2)(b) of the Act explicitly requires that a payment claim "must indicate the amount of the progress payment that the claimant claims to be due (the claimed amount)."
Additionally, section 13(3) clarifies that the claimed amount may include:
- Any amount that the respondent is liable to pay under section 27(2A) of the Act (e.g. interest).
- Any amount held under the construction contract by the respondent that the claimant claims is due for release (such as retention monies).
Case Law Clarifications
Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140
The court determined that a payment claim should be read in light of the understanding the parties have about the contract and the work.
Peter's of Kensington v Seersucker Pty Limited [2008] NSWSC 897
The court found that making payments on similarly structured previous claims is a strong indication that the parties understood what was being claimed.
Illawarra Retirement Trust v Denham Constructions Pty Ltd [2015] NSWSC 823
This case established that a payment claim is not rendered invalid by the inclusion of items not relating to construction work (though such items may not be recoverable under the Act).
Consequences of Incorrect Completion or Omission
Failing to clearly indicate the claimed amount on your payment claim will likely render the entire claim invalid, as this is one of the three essential statutory requirements under section 13(2) of the Act. An invalid payment claim cannot be enforced through the Act's statutory recovery process, meaning you would lose access to the rapid adjudication process and statutory payment protections.
3. Practical Guidance
Step-by-Step Instructions
- Calculate the total amount due: Review all construction work performed and related goods and services supplied during the relevant period.
- Include GST: Ensure the amount includes GST if applicable.
- Add any statutory entitlements: Include any amounts the respondent is liable to pay under section 27(2A) of the Act (such as interest on late payments).
- Include any retention monies due for release: If retention money is being held and is due for release, include this in your claimed amount.
- Present the amount clearly: State the claimed amount prominently and unambiguously in Australian Dollars, for example: "Claimed Amount: $125,750.00 (including GST)".
Where to Find This Information
- Your construction contract (for agreed rates and prices)
- Site records and timesheets (for labour and equipment usage)
- Delivery dockets and invoices (for materials supplied)
- Variation orders and approvals
- Previous payment claims and schedules
- Retention schedules
4. Common Mistakes and How to Avoid Them
Typical Errors
- Inconsistent amounts: Different totals appearing in different sections of the payment claim.
- Excluding GST information: Not specifying whether the claimed amount includes or excludes GST.
- Calculation errors: Arithmetic errors in tallying individual items.
- Vague or uncertain amounts: Using qualifiers like "approximately" or "about".
- Multiple claimed amounts: Having several totals without a clear indication of which is the final claimed amount.
How to Avoid These Errors
Any ambiguity regarding the claimed amount may render the payment claim invalid. To ensure accuracy:
- Double-check all calculations before finalising the payment claim.
- Have a colleague review the payment claim for clarity and consistency.
- Maintain a consistent format across all payment claims for the same project.
- Clearly separate the calculation breakdown from the final claimed amount.
- Use accounting software or a specialised construction payment claim system to reduce calculation errors.
5. Risks of Not Including This Information
An unclear or omitted claimed amount introduces significant risks that can jeopardise your payment rights.
| Risk Type | Consequence |
|---|---|
| Legal Risks | The payment claim will be invalid and unenforceable under the Act, as it's a mandatory requirement. |
| Financial Risks | Delayed payments, cash flow disruptions, loss of statutory interest, and additional administrative costs. |
| Dispute Risks | Disputes over what is being claimed, leading to challenges to validity and increased likelihood of formal dispute resolution. |
| Adjudication Risks | Limited ability to recover the full amount, reduced credibility, and potential dismissal of the adjudication application. |
6. Examples
Example 1: Standard Payment Claim
Claimed Amount: $145,875.00 (including GST)
Example 2: Payment Claim with Retention Release
Claimed Amount: $78,450.00 (including GST)
Comprising:
- Progress Payment: $72,450.00
- Retention Release Due: $6,000.00
Example 3: Final Payment Claim with Variations
Claimed Amount: $112,785.50 (including GST)
Comprising:
- Base Contract Works: $95,660.50
- Approved Variations: $12,675.00
- Daywork as Directed: $4,450.00
8. Frequently Asked Questions
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