• In short: One-off support payments will be made to hundreds more clients left out-of-pocket after the collapse of home builders 
• What’s next? The Victorian government has said it will reform the Domestic Building Contracts Act

Victims of collapsed home builders in Victoria may be eligible for one-off support payments of up to $50,000, after the state government expanded its compensation scheme that initially assisted customers of Porter Davis.

The government said the payments would be available to customers if their builder failed to take out mandatory Domestic Building Insurance on their behalf, and went into liquidation within the past 12 months.

Several hundred additional families are expected to benefit from the financial support, including clients of collapsed builders Snowdon Developments and Hallbury Homes.

When home builder Porter Davis went into liquidation in late March, it left about 1,700 home building projects in limbo, with most of those in Victoria.

In the wake of the collapse, the Victorian government offered financial support to about 560 families who had paid a deposit that included an insurance premium, but which had not been lodged with the state’s Victorian Managed Insurance Authority (VMIA).

Premier says reform will improve system that’s ‘nowhere near fit-for-purpose’

Premier Daniel Andrews said the scheme was designed to assist people who were previously “eligible for nothing”.

“We don’t think that’s fair, and that’s why we’ve stepped in,” he said.

He acknowledged the scheme would not assist everyone left out-of-pocket by the collapse of home builders.

Mr Andrews said the existing rules around home building insurance in Victoria were “nowhere near fit-for-purpose” which is why a review would take place.

“They need to be better. They need to change,” he said.

“That’s the work that’s going on now and we’ll be able to report progress on that soon.”

The state government previously announced it would reform the Domestic Building Contracts Act, with a focus on strengthening domestic building insurance requirements and bringing in tougher penalties for building companies that request deposits without taking out required insurance.

The premier said payments to the original group of Porter Davis customers deemed eligible for support were due to “hit bank accounts” in the coming days.

Victoria’s opposition backed the scheme’s expansion, describing it as the “fair and right outcome”.

The opposition’s spokeswoman on home ownership and housing affordability, Jess Wilson, said a review of the residential housing sector was crucial to restore confidence.

“This is the right outcome for hundreds of home buyers who otherwise would have lost their hard-earned deposits simply because the system and the Andrews government regulator had let them down,” she said.

“It is essential to initiate a comprehensive review of the regulation governing Victoria’s residential construction sector to ensure situations such as this do not occur again.”