Operating a trust account

• The PTA must only be opened with an approved financial institution
• 1 PTA must be opened per eligible contract
• The PTA must be opened within 20 business days after:
  • entering into the first subcontract for an eligible contract, or
  • the contract becoming eligible due to an amendment
• Include in the account name:
  • the trustee’s name and the word ‘trust’
  • any other words necessary to differentiate the account from others (optional)

• Ensure:
  • the account is not virtual or subordinate to another account
  • deposits and withdrawals create an electronic record of transfer

After opening your PTA, and whenever making changes to it, you must provide notices to certain parties. Use our handy checklist to understand the notice requirements when opening, changing, operating and closing a PTA.

• The RTA must only be opened with an approved financial institution
• A single RTA can be used for holding retention amounts for multiple contracts but you can also choose to have more than one RTA if preferred 
• The RTA must be opened: 
  • before the first retention amount is withheld or
  • if the contract is already in progress when it becomes eligible – as soon as possible, ensuring retention amounts already withheld are transferred into the RTA within 5 business days of the RTA being required.
• Include in the account name:
  • the trustee’s name and the word ‘trust’
  • any other words necessary to differentiate the account from others (optional)
• Some financial institutions allow limited characters for account names 
• Ensure:
  • deposits and withdrawals create an electronic record of transfer

After opening your RTA, and whenever making changes to it, you must provide notices to certain parties. Use our handy checklist to understand the notice requirements when opening, changing, operating and closing an RTA.

Deposits

The contracting party (e.g., principal/project owner) must deposit amounts paid to the trustee in accordance with: 

• contract terms (e.g., a claimed amount)
• a payment schedule
• a court order, adjudication decision or binding dispute resolution process

The trustee must only deposit amounts for the purpose of: 

• repaying an incorrect withdrawal
• topping up the account if there is a shortfall. 

Withdrawals

Only the trustee can withdraw amounts and only for the following purposes: 

• to pay subcontractors engaged by the trustee to carry out ‘protected work’ or supply ‘related services’ (subcontractor beneficiaries)
• to transfer a retention amount to the RTA
• as ordered by a court, adjudication decision or dispute resolution process
• to claim interest earned (once annually)
• to return an incorrect deposit
• to pay themselves (only if sufficient funds remain in the PTA to pay subcontractor beneficiaries that are due to be paid). 

Trustees must not transfer money from the PTA to anyone that isn’t listed above (e.g., suppliers, employees). For more information about who is and isn’t paid from a PTA, see Subcontractors paid from a PTA or use our simple trust account tool.

Trustees must provide notices to subcontractor beneficiaries about particular withdrawals. Use our handy checklist to understand the notice requirements.

Deposits

Only the trustee can deposit amounts into the RTA. 

Only the following amounts can be deposited:

• retention amounts
• amounts withdrawn in error
• amounts required to top up the account if there is a shortfall.

Trustees must provide a notices to the affected beneficiary after depositing a retention amount. Use our handy checklist to understand the notice requirements.

Withdrawals

Only the trustee can withdraw amounts from the RTA. 

Amounts can only be withdrawn/transferred for the following purposes:

• to be released to the party (beneficiary) the amount was withheld from
• to be paid to the trustee in the case of incomplete or defective work
• to be paid to another contractor to correct incomplete or defective work
• to claim interest earned (once annually).

Trustees must provide a notices to the affected beneficiary about withdrawing a retention amount. Use our handy checklist to understand the notice requirements.