The service of a valid payment claim sets in motion the provisions of the Act which provide a statutory right for the payee to enforce payment of the whole of the claimed amount in the event that the payer does not respond within the mandatory period with a valid payment schedule or pay the whole of the claimed amount by the due date for payment.
If you receive a payment claim under the Act and you do not agree with the way in which the payee has calculated the payment claim, you must respond by providing a payment schedule. A payment schedule must be in writing, it must identify the payment claim to which it relates, and it must state a scheduled amount, ie the amount the payer proposes to pay to the payee in response to the payment claim.
A payment schedule is intended to inform the payee as to the amount the payer proposes to pay on the due date for payment and the payer’s reasons for any difference between the scheduled amount and the claimed amount such that the payee can make an informed decision as to whether or not to pursue the unapproved amount in an adjudication.
Under section 21 of the Act, a valid payment schedule must:
- be in writing;
- identify the payment claim to which it relates; and
- state a scheduled amount.
If the scheduled amount is different from the claimed amount the payment schedule must also indicate:
- the manner in which the payer has calculated the scheduled amount;
- the reasons for any difference between the scheduled amount and the claimed amount; and
- where the difference is because the payer is withholding payment on any basis, the payer’s reasons for withholding payment.
A payment schedule must
be served on the payee within 20 working days of receipt of the payment claim unless
the parties have agreed to a different period in their contract.
If no payment schedule is provided within the mandatory period, the payer becomes liable to pay the payee the whole of the claimed amount on the due date for payment, whatever the merits of the claim.
Download a sample payment schedule here