There is a sentence every subcontractor in this country has heard.
We can't release your retention yet, the job hasn't reached practical completion.
Not your job. The head contractor's job. The one you finished your part of eleven months ago, that has since been held up by somebody else's cladding, somebody else's certifier, or a dispute you are not party to and have never been shown.
In most of Australia, and in New Zealand, that sentence may have no legal effect at all.
Not "is unfair". Not "is worth pushing back on". May have no effect, because the legislature has said so.
Why a release clause is a payment clause
Security of payment legislation across Australia and New Zealand voids what everyone calls pay when paid provisions. Most people picture the obvious version: we pay you when the developer pays us. That version has been dead for twenty years and almost nobody writes it any more.
The definitions are wider than the name.
In New South Wales, s 12(2) catches a provision that makes liability to pay, or the due date for payment, contingent or dependent on the operation of another contract. Queensland uses almost identical words at s 74(2). So do South Australia, Tasmania and the ACT.
Read that limb against a standard retention clause. Half the retention is released at practical completion under the head contract. The head contract is a document between two other companies. You are not a party to it. You cannot compel its production. You will usually never see the certificate that triggers your money.
Your entitlement is contingent on the operation of another contract. That is the limb, in terms.
The High Court dealt with a version of this in Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5, where release of retention was tied to the issue of a certificate under the head contract. It was held to be a pay when paid provision, of no effect.
Eight years ago. It is still in the standard forms.
The nine answers
This is where it stops being one rule and starts being nine. We keep a register of these because we have to build to them, and the differences are not cosmetic.
| Where | Provision | Does it reach retention release tied to the head contract? |
|---|---|---|
| New Zealand | s 18I(1)(a) with s 13(2)(ca) | Named, and the widest. A term making payment of retention money conditional on anything other than the subcontractor's own performance has no legal effect. Not just "another contract". Anything. |
| Western Australia | s 14(1)(c)(iv) | Named. The definition expressly covers a provision making the release of retention money contingent on the operation of another contract. |
| Victoria | s 13(2)(c)(iv) | Named, since 2026. Catches a provision making the right to claim the release of a performance security contingent on another contract, and retention money became a species of performance security in Victoria in April 2026. |
| New South Wales | s 12(2)(c) | Catch-all. Liability or due date contingent on the operation of another contract. Retention release has to be argued into it. |
| Queensland | s 74(2) | Catch-all, near identical wording. A contract containing one is also treated as not providing for a due date, and the Act supplies the default in its place. |
| South Australia | s 12 | Catch-all. This is the provision Maxcon was decided under. |
| Tasmania | s 16(1)(c) | Catch-all. Note the drafting: the provision is deprived of effect rather than declared void. |
| ACT | s 14(2)(c) | Catch-all, and wide enough to catch back-to-back timing clauses that never use the word "paid". |
| Northern Territory | s 12 | The gap. Only catches liability made contingent, directly or indirectly, on party A being paid by someone else. There is no "operation of another contract" limb. A clause keyed to a milestone rather than a payment may sit outside it, though "indirectly" leaves something to argue about. |
Three tiers, and it matters which one you are standing in.
Three jurisdictions have now legislated the point in terms. New Zealand, Western Australia and Victoria do not require anyone to argue that a retention release is a payment. The Act says so. New Zealand goes furthest: your retention cannot be made conditional on anything except your own performance. Not the head contract, not practical completion elsewhere, not the developer's finance, not anything.
Five run on the catch-all limb. New South Wales, Queensland, South Australia, Tasmania and the ACT reach the same place by a slightly longer route, through the words "the operation of another contract". Maxcon is the reason that route is well trodden.
The Northern Territory is different in kind. Its s 12 is drafted around being paid, not around another contract operating. A release clause tied to a milestone under the head contract is not obviously a clause about payment by a third party — though the section reaches contingencies that are indirect as well as direct, so the point is arguable rather than settled. That is a real gap and it is worth knowing it exists rather than assuming the national position applies.
What none of this means
It does not mean the clause is not in your subcontract. It almost certainly is, in a standard form, in plain sight, and it has probably never been questioned by anyone who signed one.
It does not mean the money appears. Legislation that deprives a clause of effect does not write you a cheque. What it does is remove a reason, and the reason is usually all that is standing there.
It does not mean every retention release clause is caught. A clause tied to your practical completion, on your subcontract, is a normal commercial term and nothing above touches it. The question is always whose completion the clause is keyed to.
And it is not legal advice. We are not lawyers, we build software that automates legislative processes, and nothing here is a view about your contract. What we can tell you is what the Acts say, because we have to read all nine of them to build anything at all.
The question underneath
Here is what actually decides whether any of this is useful to you.
Go and find the release clause on your largest finished job. Not the contract sum, not the invoice. The clause that says when the first half of your retention falls due.
Does it trigger on your practical completion, or on somebody else's?
Most people cannot answer that in under ten minutes, and a fair number cannot answer it at all, because the subcontract is in a folder on somebody's laptop and the retention balance is a figure in an email from last winter.
That is the real problem, and it is upstream of every legal question above. You cannot contest a clause you have not read, on money you cannot put a number to, on a date you did not diarise.
The legislation has done its part. New Zealand named retention money in 2015, three years before the High Court was asked the question. The catch-all limb has been settled since 2018. Western Australia and Victoria have named it since.
The part it cannot do is know what you are owed.
Our guide to retention sets out the two conditions that gate each release, and what the acts allow to be withheld in the first place.
A post, not a guide
This is a record of what we argued on 1 September 2026, and it is not edited afterwards. It states no statutory deadline on purpose; the guides and timing by jurisdiction carry the figures and are reviewed when the acts move.