The Home Building Compensation Fund (HBCF) provides protection for families building their own homes if their builder goes bust. It also allows homeowners to make a claim if the contractor has died, disappears or their builder’s licence is suspended for ignoring an order to compensate the home owner.
While the HBCF is critical to the health of the entire industry, important elements have not been updated in more than a decade. The fund’s maximum coverage was set more than 10 years ago at $340,000 but building costs have grown 60 per cent over that time, making it appropriate to consider whether this should be updated.
Adjusting the coverage amount will strengthen the fund’s effectiveness and support housing supply by ensuring financial protections keep pace with rising costs, facilitating continued industry stability and growth. Ensuring better protections are in place supports the Labor Government’s plans to increase housing supply by building confidence in the construction sector.
Over the past five years, more than 1000 Penalty Infringement notices have been issued and 188 builders have been prosecuted for failing to hold the correct insurance.
Respected industry leader Bronwyn Weir has been appointed to undertake the review and is tasked with providing advice to the Government on issues including:
- Assessing high rates of insolvencies in the building industry
- Consumer awareness and builder compliance
- Appropriate help for consumers who are unlawfully insured
- Whether the existing insurance cover amount is adequate, and
- Whether the scheme is operating effectively.
Information on the scheme, what protection it offers and how it operates can be found at https://www.sira.nsw.gov.au/insurance-coverage/home-building-compensation-insurance
Minister for Customer Service and Digital Government Jihad Dib said:
“Bronwyn Weir is an industry leader with the right skills and experience to deliver practical recommendations to protect families building and renovating homes in NSW.
“I am looking for grounded, pragmatic suggestions about how government and industry can, together, improve the operation of the Home Building Compensation scheme.”
“This review complements the broader reform work undertaken by Minister Chanthivong through the Building Commission. Now that I have taken carriage of the State Insurance Regulatory Authority, I look forward to seeing the outcomes of this review progress and delivering a better scheme for people building a home or renovating.”
Minister for Building Anoulack Chanthivong said:
“This is another opportunity to lift standards in the sector and deliver more homes that are higher quality for people in NSW.”
“Last year, we set up Building Commission NSW and gave it the power it needs to stop bad building work in its tracks. Now, we’re getting on with action to give mum and dad builders and renovators confidence that they are protected if the worst should happen.”
“By getting these settings right we’ll also be helping lock in a more resilient building sector for the future.”
Chief Executive of SIRA Mandy Young said:
“This review marks a significant step forward for families investing in their homes in NSW, ensuring the fund remains a robust safeguard. We’re eager to see the findings lead to real improvements for those facing building insolvency and other issues, maintaining our commitment to keeping things fair and reliable.”
