Following on from last month’s newsletter article in relation to the QBCC’s new legislation on Security of Payment, this month we will look in depth at Project Bank Accounts (PBAs). A PBA is a set of three trust accounts where funds are held in trust for head contractors and subcontractors until payments are due, as part of a building project.

Phase One of PBAs began from 1 March 2018 on State Government funded projects valued between $1 million and $10 million (including GST). Following successful implementation, PBAs will be required on all building projects with a contract value of more than $1 million (including GST) in 2019. PBAs will not apply to engineering and infrastructure projects including bridges, roads and ports, unless ‘building work’

Who is involved in a PBA?

There are 3 parties involved in a PBA including the:

  • Principal—who the building work is being carried out for under the contract
  • Head Contractor—who is carrying out the building work under the contract
  • Subcontractor—first-tier subcontractors who have been subcontracted by the Head Contractor to carry out work under the contract.

What is a PBA?

A PBA is a set of 3 bank accounts that operate as a trust.

The Head Contractor is the PBA ‘trustee’ and a beneficiary; each Subcontractor who signs a subcontract becomes a beneficiary. A separate PBA is required for each building contract.

The PBA, which must be set up at a financial institution in Queensland has the following accounts:

  • A general trust account—the Principal makes payments into this account.
  • A retention trust account—it holds Subcontractor’s retention money.
  • A disputed funds trust account—holds amounts subject to certain payment disputes until resolution.

Why is the PBA important?

Payment delays and non-payments impact heavily on Subcontractors, resulting in financial and social stresses on them, their families, employees, suppliers and the wider community.

PBAs will ensure that Subcontractors get paid regularly in a timely manner, that their retention and disputed monies are protected, and that the PBA monies due to them are protected in the event of contract termination or bankruptcy.

Are there any PBA exclusions?

A PBA is not needed for civil, engineering and infrastructure projects such as bridges, roads, tunnels, busways or railways.

Some civil or infrastructure projects do however include ‘building work’ as defined by the law, and the ‘more than 50 percent of contract price’ test must be applied to determine if a PBA is required.

More information about PBA exclusions is included in the guidelines below.

What are the PBA requirements?

A range of guidelines have been prepared by the Queensland Government’s Department of Housing and Public Works to outline the responsibilities of each party to a PBA.

Guidelines for:


Ellen Mubwandarikwa