What's changed in the BIFOLA Act? | Queensland Building and Construction Commission
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On 1 July 2024 amendments to the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2024 commenced. 

The BIFOLA Act amendments include changes to:

  • The Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) to clarify and simplify several requirements of the trust account framework.
  • The Queensland Building and Construction Commission Act 1991 (QBCC Act), Building Act 1975 (BA), and Plumbing and Drainage Act 2018 (PDA) to formalise the Government’s response to several recommendations of the QBCC governance review.
  • the BIF Act, QBCC Act, BA, PDA, Architects Act 2002, and Professional Engineers Act 2002 that have assorted and minor technical amendments (that are not outlined).  

Most licensees will not need to do anything differently due to the BIFOLA amendments.  

The majority of the changes are designed to make it easier to understand how the laws are meant to operate and make them simpler to follow.  

Transfer of technical requirements  

From 1 July 2024, the QBCC will no longer be responsible for setting the technical qualification requirements for a plumbing or drainage licence or endorsement, this responsibility has been transferred to the Department of Housing, Local Government, Planning and Public Works (the department).

If you hold a QBCC licence or endorsement, it will not change and there is nothing for you to do.  

The current required qualifications and experience set by the QBCC will continue to apply, and any changes to these requirements will be communicated ahead of time.

These changes act on recommendations from the 2022 QBCC Governance Review Report, aimed at refocusing the QBCC’s regulatory role to licensing and compliance of the industry.  

Changes to the trust account framework  

Trust accounts help to protect subcontractors’ progress payments and retentions particularly in the event of insolvency.  

Amendments have been made to the trust account framework to reduce the cost and complexity and support industry.  

Subcontractor beneficiary

To help industry determine which subcontractors and payments are protected, the definition for who is a ‘subcontractor beneficiary’ of the project trust has been simplified to mean any contractor who is required to hold a license or registration to carry out the work.  

There are some additional subcontractors prescribed in the regulation as also being beneficiaries.

Prescribed additional types of subcontractor ‘beneficiaries’  

Some additional subcontractors have been specified as being beneficiaries. These include contractors doing the following types of subcontracted work:

  • earthmoving and excavating  
  • installing prefabricated buildings, building parts or building components  
  • the external or internal cleaning of buildings and other works  
  • site restoration and landscaping activities  

The offsite manufacture, supply and transportation to site of prefabricated buildings building parts or building components (where the subcontractor is not performing any installation work) is NOT subcontract work and not protected by the trust accounts.

Prescribed subcontracted work

Some additional types of work have been specified as being subcontract work, which means subcontractors undertaking this work are protected.  

These include the following works:

  • earthmoving and excavating  
  • installing prefabricated buildings, building parts or building components  
  • the external or internal cleaning of buildings and other works  
  • site restoration and landscaping activities.  

The offsite manufacture, supply and transportation to site of prefabricated buildings building parts or building components (where the subcontractor is not performing any installation work) is NOT subcontract work and not protected by the trust accounts.

Clarification of retention amounts including GST

As cash retention amounts are withheld over a longer period of time until the end of defect periods, it is important the full retention amount, inclusive of any applicable GST, is protected to reduce the risks of non-payment.

Amendments have been made to put beyond doubt that the trust protections apply to this full retention amount. However, to support industry transition, this amendment clarifying that retention amounts include any applicable GST, is not commencing until a later date to be determined.  

The department has engaged an independent taxation expert to interact with the Australian Tax Office to provide advice on how industry can apply the GST requirements.

Sufficient time will be provided for industry to adjust their processes to meet this requirement.

As this was always the policy intent, where industry have already been including GST in the retention amounts held in trust, it is recommended this practice continue.

Retention trust training no longer mandatory  

Trustees will no longer be required to complete the mandatory retention trust training.

This change will reduce red tape for industry and provide industry with flexibility to choose from a range of training and resources provided by industry and the QBCC that support awareness and compliance.

Accounting and auditing

Some of the trust account compliance requirements have been relaxed.

Trustees will no longer be required to engage an auditor to carry out an account review report. This applies to all trustees and opened trust accounts from 1 July 2024.

This change will support industry transition over a longer period as they adapt to the new record keeping and software requirements.

The QBCC will continue its monitoring and auditing role in the interim.

Trust account records and reports

The amendments simplify the record keeping requirements for trust accounts.

The simplified and less prescriptive record keeping requirements are aligned to standard accounting practice and therefore will help to fast-track software solutions to support compliance.

Software

The department has been working closely with more than 30 digital software providers over the past nine months to clarify record keeping requirements and support the development of software tools.

Software solutions will be assessed by the department to ensure they meet the requirements and a list of suitable products to suit various sized businesses will be published to give trustees confidence that the products will enable them to comply with record keeping requirements.

It is expected software will progressively become available in the market from September 2024, with the majority of common software platforms having solutions by early 2025.

Industry is encouraged to consider the best solution based on current systems and business needs. It is not expected that existing trustees need to rely on the earliest available solution and will instead have time to consider all options.

Record keeping – regulatory approach

Industry will be given an extended transitional period to adapt to the specific record keeping requirements for trust accounts, including to transition to compliant software.

This extended transitional period recognises the limited software availability and time needed to update business processes and systems and will continue until July 2025.  

During this time, the QBCC will be exercising an educative approach with the trust record keeping requirements while continuing to focus compliance activities towards ensuring the proper opening and keeping of trust accounts and on-time payments to beneficiaries.

Minimum financial requirements

Amendments also clarify the interaction between the building trust framework and the MFR Regulation requirements specifically, to avoid potential double accounting.

If you have questions, email the Trust Compliance Team directly at: trustaccounts@qbcc.qld.gov.au 


Last reviewed: 1 Jul 2024 Last published: 1 Jul 2024
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