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Financial institutions and project bank accounts

New laws

The Building Industry Fairness (Security of Payment) and Other Legislation Act 2020 received assent on 23 July 2020.

This Act will replace project bank accounts with a new trust account framework, delivering a more streamlined framework. Read about the new trust account framework.

The following information only applies to project bank accounts for certain government contracts tendered after 1 March 2018 up to 28 February 2021.

The Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) requires PBAs to be used for certain building and construction contracts in Queensland.

The head contractor for an eligible contract must determine whether a contract requires a PBA. If so, they must establish a PBA and use it to facilitate payments between the principal and head contractor, and head contractor and first-tier subcontractors. Some exceptions may apply depending on the circumstances.

Read more about what a PBA is and determining if a PBA is required.

Rules for opening PBAs

A PBA must be opened at the office or branch of a financial institution within Queensland within the time stated in the applicable building contract, but at the very latest, within 20 business days of the head contractor entering into its first subcontract.

The name of each account that forms a PBA must contain the words 'trust'.

The provisions of the Trust Accounts Act 1973 (Qld) and Trusts Act 1973 (Qld) don't apply to these accounts. PBAs are statutory trusts, governed by the requirements of the BIF Act and common law.

Read more about setting up a PBA.

Requirements for operating PBAs

The head contractor is responsible for managing funds held in the PBAs, as the trustee of the accounts.

They must:

  • make all deposits to PBA accounts only through electronic transfers
  • make all withdrawals from, and transfers between, the trust accounts using a payment instruction given to the financial institution.

These requirements prevent cash withdrawals and ensure that the principal has adequate transparency of transaction records through their account viewing access.

Head contractors are entitled to the interest earned on the PBA trust accounts, but they can only withdraw an amount equal to the interest earned from each trust account once every 12 months or when closing the PBA.

Read more about operating a PBA.

Principal's role

Principal's viewing access

The PBA trust accounts must allow the contract's principal (or their agent or employee) electronic viewing access to:

  • detailed transaction information on all individual deposits and withdrawals for the PBAs, including financial institution and account details, dates and payment amounts etc (this includes payment instruction information relating to retention and disputed funds accounts)
  • account payment reports detailing deposits into, and withdrawals from, PBAs.

The principal must be able to view the above information until the accounts are closed.

This access allows the contract principal to monitor the accounts to ensure that subcontractors are being paid in accordance with the BIF Act.

Principals must report certain payment discrepancies to the Queensland Building and Construction Commission, but don't have a role in authorising payments made through PBAs.

Principal 'step in' powers

In certain circumstances, including contract termination or head contractor insolvency (in section 54 of the BIF Act) the principal may decide to assume the role of trustee to a project bank account.

If this occurs, the head contractor must inform the banking institution that the principal will act as trustee of the PBA.

Bank fees and charges

The BIF Act doesn't regulate the fees and charges that a financial institution may levy on the head contractor to provide PBAs.

Resources on PBAs

For more detail on PBA requirements, see:


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