Cracking the Code: The Payment Schedule – Responding to a Claim

Welcome back to our series on navigating the Security of Payment Act (SOPA). In Part 1, we covered the purpose of the Act, and in Part 2, we detailed how a contractor initiates the process by serving a valid Payment Claim.
Once that claim lands on your desk, the clock starts ticking. The Act places strict obligations on the recipient (the respondent) to reply in a specific way and within a very tight timeframe. Your response, known as a Payment Schedule, is just as critical as the initial claim. Failing to serve a valid Payment Schedule in time can have severe and immediate financial consequences, effectively leaving you with no grounds to dispute the amount claimed.
What is a Payment Schedule?
A Payment Schedule is the formal, written response to a Payment Claim. It is your one and only opportunity to state your position on the amount claimed. You cannot simply ignore a claim or pick up the phone to dispute it. Under SOPA, your formal written response is what matters.
A valid Payment Schedule must do two key things:
- It must identify the Payment Claim to which it relates.
- It must state the amount of payment, if any, that you propose to make. This is called the "scheduled amount."
If the scheduled amount is less than the amount claimed in the Payment Claim, the Payment Schedule must also detail the reasons why.
The Golden Rule: State All Your Reasons for Withholding Payment
This is the most critical aspect of preparing a Payment Schedule. If you intend to pay less than the full amount claimed, you must clearly and comprehensively explain why.
For each item you are disputing, you must state your reasons for doing so. For example, you might withhold payment because:
- The work is defective and requires rectification.
- The work has not been completed.
- The claim includes variations that were not approved in writing.
- The work was not calculated in accordance with the rates in the contract.
Why is this so important? Because if the matter proceeds to adjudication, you are generally locked into the reasons you provided in your Payment Schedule. You cannot introduce new arguments or reasons for non-payment later in the process. A vague response like "work is incomplete" or "disputed variations" will not be sufficient. You must provide specifics. Failing to do so will hamstring your defence and may force an adjudicator to disregard your arguments entirely.
The Clock is Ticking: Strict Timeframes for a Response
This is where the real teeth of the Act are found. Upon receiving a valid Payment Claim, you have a strict deadline to serve your Payment Schedule on the claimant.
The deadline is the
earlier of:
- The time required by the construction contract, or
- 10 business days after the Payment Claim was served.
"Business days" means any day other than a Saturday, Sunday, a public holiday, or the period between Christmas and New Year (22-10 January).
This 10-day deadline is absolute. There are no extensions. The consequences of failing to serve a Payment Schedule within this timeframe are severe.
The Dire Consequences of Failing to Respond in Time
If you fail to provide a Payment Schedule within the 10-business-day limit, you become liable to pay the entire amount claimed in the Payment Claim.
The claimant can then proceed down one of two paths:
Seek Adjudication: The claimant can apply for adjudication, and because you did not provide any reasons for withholding payment, an adjudicator will almost certainly award the full claimed amount in the claimant's favour.- Court Action: The claimant can go to court to recover the claimed amount as a debt due. In this scenario, the court is not concerned with the merits of the claim (e.g., whether the work was defective). The only issue is that a valid Payment Claim was served and you failed to respond with a Payment Schedule in time. You will be prevented from raising any cross-claims or defences related to the construction contract.
In short, silence is treated as acceptance. Failing to respond is the biggest mistake a respondent can make, and it almost always leads to an obligation to pay 100% of the amount claimed.

Senior Solicitor
Email: kristen@hntlegal.com.au








