Progress claims and payment claims explained

Progress claim vs payment claim

On site the two terms get used interchangeably, and in practice they are usually the same piece of paper. The distinction matters legally:

• Progress claim — a contractual entitlement. Your contract sets when you can claim, what evidence you attach, and when payment falls due.
• Payment claim — a statutory entitlement under the security of payment Act in your state or territory. Serve a compliant claim and the respondent must answer it within a fixed period or face consequences, with rapid adjudication available if they dispute the amount.

The security of payment regime exists because cash flow down the contracting chain used to stall on nothing more than silence. Its whole design is "pay now, argue later" — you get paid the progress amount, and the final valuation fight happens afterwards.

What a payment claim must contain

• Identification of the work — the construction work or related goods and services the claim relates to, at enough detail that the other side can value it. Line items against the contract breakdown, not a single lump figure.
• The claimed amount — value of work completed to date, less amounts previously claimed, plus approved variations, less retention, plus GST.
• The reference date and claim period — which month or milestone the claim covers, and the claim number in sequence.
• A statement referencing the Act — several jurisdictions require the claim to state that it is made under the relevant security of payment legislation. Check yours; where it is required, leaving it off can cost you the statutory rights entirely.
• Proper service — served on the person liable to pay, by a method the contract or Act allows, with a record of when.
• Supporting evidence — site diary entries, progress photos, signed variations, supplier invoices for materials on site.

The payment schedule and what happens if it never arrives

If the respondent intends to pay less than the claimed amount, they must issue a payment schedule within the period set by the Act or the contract, stating the scheduled amount and the reasons for withholding. Reasons not raised in the payment schedule generally cannot be raised later in adjudication — which is why a vague "we dispute the claim" schedule is worth very little to the party writing it.

If no payment schedule is served in time, the respondent typically becomes liable for the full claimed amount on the due date, and the claimant can pursue judgment or adjudication. If a schedule is served but the scheduled amount is less than claimed, the claimant can apply for adjudication — a fast determination by an independent adjudicator, usually measured in weeks rather than the months a court would take.

Every one of those steps runs on dates. Serve late, or lose the record of when you served, and the strongest claim in the world is out of time.

Retention, variations and GST

The order of operations trips people up constantly. The usual sequence:

1. Value each contract item at its percentage complete to date.
2. Add approved variations at their agreed value and percentage complete.
3. Subtract the total previously claimed to get this claim's gross amount.
4. Deduct retention (commonly 5% of the value of work, often capped at 5% of the contract sum, with half released at practical completion and the balance at the end of the defects liability period).
5. Apply GST at 10% to the net amount payable.

Unapproved variations are the other recurring problem. If the client verbally asked for the change and nothing was signed, it is not going into a claim cleanly — the variation needs to be priced, approved and dated before it earns a line.

Worked example: claim 04 on a $363,400 contract

A residential build with one approved variation. Claim 03 was assessed at the "previous" percentages; claim 04 values the work completed this month.

Note what the roofing line does: it went from 40% to 100%, so the claim picks up 60% of $54,000 — not the whole item. Claiming the full value of a partly-claimed item is the fastest way to get the whole claim scheduled down.

Where claims get knocked back

• Claiming ahead of the work. Optimistic percentages invite a low payment schedule and poison the next three claims.
• Variations with no paper. No signed approval, no line in the claim.
• Double-claiming. An item claimed at 100% last month reappearing at 100% this month, instead of the delta.
• Missing the reference date. Claiming outside the window the contract or Act allows.
• No record of service. If you cannot show when the claim was served, you cannot show the schedule was late.
• Retention miscalculated. Applied to the GST-inclusive figure, or kept accruing past the contract cap.

Common questions