Project Trust Accounts, formerly know as Project Bank accounts have been required for Queensland Government projects valued between $1 million and $10 million since March 2018.
Changes to the Building Industry Fairness Act implemented a simplified trust account framework. The new project and retention trust accounts will continue to protect payments to contractors, as well as reduce the administrative burden for head contractors.
From 1 March 2021, the new trust account model had the following changes:
fewer accounts required – one project trust account per project, but only one retention trust account per contractor (formerly one per project), if cash retentions are held – the disputed funds account has been removed and replaced by added protections for subcontractors
more subcontractors protected – by extending the range of work and monetary value that is covered by the project trust
statutory charge over retention amounts – will make beneficiaries secured creditors in the event of bankruptcy
viewing access for principals – has been removed for trust accounts
the QBCC will have greater oversight – of the trust account framework including the ability to undertake audits, require independent audits of accounts, receive notifications about trust accounts, freeze trust accounts and appoint a special investigator.
The new trust account requirements were expanded to cover more projects and protect more subcontractors in phases to ensure the industry had time to adapt and prepare for the changes – eligibility for each phase will be defined by who is the project owner (or the principal) and the contract price for the project as outlined below:
PTAs phases Applies to:
1 March 2021
Eligible state government contracts valued between $1M and $10M (excluding GST). This cohort presently uses PBAs. Applies to contracts “tendered” from 1 March 2021.
1 July 2021
Eligible government and Hospital and Health Services (HHS) building and construction contracts valued at $1 million or more (excluding GST). Applies to contracts “tendered” from 1 July 2021.
1 January 2022
Eligible private sector, local government, statutory authorities’ and government-owned corporations’ building and construction contracts (entered from commencement) and valued at $10 million or more (excluding GST).
1 July 2022
Eligible private sector, local government, statutory authorities’ and government-owned corporations’ building and construction contracts (entered from commencement) valued at $3 million or more (excluding GST).
1 January 2023
All eligible building and construction contracts (entered from commencement) valued at $1 million or more (excluding GST) and subcontractors working on project trust account projects that hold cash retentions, will need a retention trust account.
For more information about Project Trust Accounts see the QBCC website at qbcc.qld.gov.au or contact us for a confidential chat.