1. Field Name and Definition

The "Statement under the Act" is a mandatory declaration that must be included on every Payment Claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW). This statement is not merely a formality; it is a critical component that explicitly identifies the document as a statutory Payment Claim.

By including this statement, you trigger the legal rights, obligations, and strict timeframes established by the Security of Payment legislation. In a Cost Plus contract, this is particularly important as it clearly distinguishes a statutory claim from a regular invoice or progress report that might be issued under the contract's general terms. Without this statement, your document will not be considered a valid Payment Claim under the Act, and you cannot access the Act's powerful and rapid payment enforcement mechanisms.

2. Legal Requirements

Statutory Framework

The requirement for this statement is enshrined in the legislation itself.

Case Law Clarifications

The courts have consistently reinforced the importance of this statement, while also providing guidance on what constitutes acceptable compliance.

Consequences of Omission

Forgetting to include the Statement under the Act is a fatal error that invalidates the Payment Claim. This has significant consequences:

• The statutory timeframe for the respondent to provide a Payment Schedule is not triggered.
• You lose access to the Act’s rapid adjudication process to resolve disputes.

3. Practical Guidance

Step-by-Step Instructions

1. Decide on Placement: The statement must be prominently displayed. Best practice is to place it in the header, near the top of the document, or in a dedicated, attention-grabbing box.
2. Use Clear Language: While the exact wording isn't prescribed, the statement must unambiguously declare that the claim is made under the Building and Construction Industry Security of Payment Act 1999 (NSW).
3. Include on Every Page: To avoid any ambiguity, it is best practice to include the statement on every single page of your Payment Claim, including all attachments.
4. Review Before Serving: Always double-check that the statement is present and correct before serving the claim on the respondent.

Recommended Wording

While the Act does not specify the exact phrasing, the following examples are commonly used and accepted:

• "This is a Payment Claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW)"
• "Payment Claim pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW)"
• "This document is a Payment Claim under the Building and Construction Industry Security of Payment Act 1999"

For Cost Plus contracts, the same wording applies. No special or additional wording is required.

4. Common Mistakes and How to Avoid Them

Typical Errors

• Complete Omission: The most critical error is simply forgetting to include the statement.
• Incorrect Act Reference: Referring to the wrong legislation (e.g., a different state's Act) or an outdated version.
• Ambiguous Wording: Using language that is unclear or does not explicitly state the claim is made "under the Act".
• Relying on Pre-Printed Forms: Using standard invoice templates that lack the required statutory declaration.

Best Practices

1. Use Templates: Develop a standard Payment Claim template that includes the statement by default.
2. Create a Checklist: Implement a pre-submission checklist that requires verification of the statement's presence.
3. Staff Training: Ensure all personnel involved in preparing claims understand the critical importance of this requirement.
4. Professional Review: For high-value or complex projects, consider having your first Payment Claim in the series reviewed by a construction compliance professional.

5. Risks of Not Including This Information

Omitting the statement exposes you to significant legal, financial, and strategic risks, effectively stripping the claim of its statutory power.

6. Examples

PAYMENT CLAIM

This is a Payment Claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW)

Project: 123 Smith Street Renovation
Claim Period: 1 July 2025 to 31 July 2025
Claim Number: 03

COST PLUS PAYMENT CLAIM SUMMARY:
Labour Costs: $28,450.00
Materials: $42,675.50
Builder's Margin (15%): $14,448.83
TOTAL AMOUNT CLAIMED (inc. GST): $121,953.17
                            

BUILDER'S PAYMENT CLAIM
Project No. LRG-2025-789 | Sydney Commercial Tower

THIS DOCUMENT IS A PAYMENT CLAIM MADE UNDER THE BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT 1999 (NSW)

Claim No: 07
Period: July 2025

COST PLUS CONTRACT SUMMARY:
Direct Costs (as per attached schedules): $858,810.00
Builder's Margin (12%): $103,057.20
GST: $96,186.72

TOTAL THIS CLAIM: $1,058,053.92
                            

7. Related Fields

The Statement under the Act is intrinsically linked to other key components of a valid Payment Claim.

• Claimed Amount: The statement confirms that the amount indicated is being claimed under the Act's statutory provisions.
• Work Description: The statement gives statutory weight to the description of the construction work or related goods and services being claimed for.
• Contract Details: The statement must be consistent with the contract information provided, ensuring the claim is made under the correct legal agreement.
• Supporting Statement: For head contractors, this statement works in tandem with the separate supporting statement regarding subcontractor payments, forming a complete compliance package.

8. Frequently Asked Questions