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From March 2018, government projects with a contract price between $1 million-$10 million require a Project Bank Account (PBA). PBAs will only apply to contracts where more than 50% of the contract price is for building work, where the principal is the State government or authority (if they elect to opt in) and when the head contractor enters into a subcontract for all or part of the contracted building work.
PBAs are NOT required for maintenance work contracts or contracts issued or advertised for tender prior to 1 March 2018.
There are some additional obligations in the Government's head contracts which you are also required to comply with. as well as the Regulations and the Transitional Regulations.
What is a Project Bank Account (PBA)?
PBAs are a trust over:
- Amounts paid by the principal to the head contractor
- Amounts that the subcontractor is entitled to be paid under a subcontract
- Retention amounts withheld from a subcontractor under a subcontract
- Amounts that are the subject of a payment dispute under the Act .
PBAs only apply to first tier subcontracts (unless the subcontractor is a related entity of the head contractor). Some suppliers are considered first tier subcontractors.
The head contractor is the trustee over the PBA.
- be opened at office or branch of financial institution within Qld
- not permit deposits/withdrawals other than by electronic transfer
- permit withdrawals by payment instruction to bank only
- permit transfers between trust accounts by payment instruction to bank only
- include "trust account" in Account Name
The principal (and/or its agent) must be able to view:
- all transactions in/out of trust accounts
- information on payment instructions
- account payment reports.
The head contractor may close trust accounts if:
- subcontractors have been paid all amounts they are entitled to be paid under the subcontracts
- only building work to be done is maintenance work
- (Note: Head contractor must notify principal of closure within 10 business days)
The head contractor should notify principal of account details within 10 business days when:
- opening a trust account
- changing name of a trust account
- closing a trust account.
Prior to entering into a subcontract and in approved form, or if the contract becomes a PBA contract after, then within 10 business days of that date, the head contractor should notify the subcontractor that:
- PBA will be used for payments
- details of PBA accounts.
Within 5 business days of entering into a subcontract or a change occurring and in approved form, the head contractor must notify the principal of the subcontract info prescribed by regulation.
Get in touch
Need more information on how to implement PBAs into your business? Contact us and one of our experts will be in touch to provide you with the advice you need, at no extra charge.