The retention trust scheme under the Building and Construction Industry (Security of Payment) Act 2021 requires retention money withheld under eligible construction contracts to be held in a retention money trust account with a recognised financial institution.

Timeline for the requirements:

• After 1 February 2023 – Construction contracts over $1,000,000 (including GST) that require the holding of retention monies will be required to hold the funds in a retention trust account.
• From 1 February 2024 – Construction contracts over $20,000 (including GST) that require the holding of retention monies will be required to hold the funds in a retention trust account.

Contracts entered into before 1 February 2023 do not require retention money to be held in a trust account.

The guideline document below is written to assist current and future parties that are using, or will use, retention money as a method of performance security to understand their rights and obligations under the Retention Trust Scheme. 

This guide provides information on:

• Determining whether a retention trust is required.
• How and when to open a retention trust account.
• How to operate a retention trust account.
• How to end a retention trust.
• The rights and obligations of the parties involved.