Criteria for a project bank account

New laws

On 1 March 2021, project bank accounts were replaced with a new streamlined trust account framework. Read about the new trust account framework.

The following information only applies to project bank accounts for certain government contracts with tenders released between 1 March 2018 and 28 February 2021.

A head contractor is responsible for determining whether a project bank account (PBA) is needed for a building contract for a project.

This information is a summary of the criteria for deciding whether a project needs a PBA.

For more detail, including a decision tree, read the Head contractors guidelines (PDF, 981KB).

Threshold tests

The head contractor needs to apply threshold tests to decide whether to set up a PBA. If the project passes all the tests, they must set it up.

A contract needs a PBA if the tender was released between 1 March 2018 and 28 February 2021, and the Queensland Government is the principal (i.e. departments and any statutory authority who opts in).

It must also pass these 3 threshold tests:

  • More than 50% of the contract value is for building work.
  • The contract value is $1 million–$10 million (including GST).
  • At least 1 subcontractor will be engaged under the contract.

If the project contains several different aspects of work, the head contractor must determine how much of the contract price is needed to complete each component.

However, a PBA isn't needed if the head contractor can prove there are fewer than 90 days between the date a PBA would be required and the project's practical completion date.

For more about the threshold tests, read the Head contractors guidelines (PDF, 981KB).

PBA exemptions

Some projects are exempt from PBAs. You don't need a PBA for:

  • civil, engineering and infrastructure projects, such as bridges, roads, tunnels, busways or railways (although some civil and infrastructure projects include building work, as defined by the law, so you need to apply the 'more than 50%' test to decide if you need a PBA)
  • a residential construction work contract, unless it's for 3 or more living units with the Department of Energy and Public Works as the principal
  • contracts solely for maintenance work that involves ongoing restoration, replacement or work to prevent deterioration of a building or part of a building (excluding building refurbishment and capital improvements)
  • Queensland Government contracts advertised or tendered before 1 March 2018.

There are penalties for failing to establish a PBA when required.

Read more about monitoring and compliance.

Suppliers or subcontractors

Before setting up a PBA, a head contractor should also determine whether they have subcontractors or suppliers according to the law.

A supplier is a party to a contract who both:

  • supplies goods and services without also carrying out the work
  • doesn't require a licence under a relevant Act to lawfully supply those goods and services.

Some suppliers may also be subcontractors if they're required to hold a licence or other authority to lawfully supply the goods or services. The relevant Acts for these licences/authorities include:

  • Building Act 1975
  • Electrical Safety Act 2002
  • Plumbing and Drainage Act 2002
  • Queensland Building and Construction Commission Act 1991.

If a contractor or supplier supplies goods and services for which they must hold a relevant licence, or they also carry out building work, they're a subcontractor for the purposes of a PBA and must be paid through the PBA.

Labour hire companies

A labour hire company is considered a subcontractor for the PBA project (and must be paid through the PBA accounts) if either:

  • it is carrying out any building work
  • the type of work it is carrying out requires a licence under the Building Act 1975, Electrical Safety Act 2002, Plumbing and Drainage Act 2002 or Queensland Building and Construction Commission Act 1991.

Contract variations

Sometimes contract variations or amendments during a project can cause a project to require a PBA, even if it didn't need one when it started.

Read about the effect of contract variations on PBAs.


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