Do I have to pay an unlicensed tradesperson?

It depends on the state and the work. Some jurisdictions restrict an unlicensed contractor's ability to enforce payment for work that required a licence. That is not a licence to refuse payment for work properly done, and the safe course is to get advice from your state consumer body rather than simply withholding.

Will my insurance be void if unlicensed work caused damage?

Not automatically, and it depends on your policy and the facts. Insurers do examine how work was performed when it contributed to a loss, and unlicensed work in a regulated trade is a significantly weaker position than certified work. Disclose it rather than hope it does not come up.

How do I check whether someone is licensed?

Ask for the number and search it on your state's register — NSW Fair Trading, the VBA and Energy Safe in Victoria, QBCC in Queensland, Building and Energy in WA, CBS in South Australia, CBOS in Tasmania, Access Canberra in the ACT, or the NT registers. Each state guide on this site links to the right one.

Unlicensed work: what it costs you

Short answer

Penalties for unlicensed work fall on the tradesperson, but the practical costs fall on you: no compliance certificate, complications with insurance if the work causes damage, problems at sale, and a far harder path to any remedy because the operator is frequently uninsured and sometimes untraceable. Your consumer guarantees survive; your ability to enforce them often does not.

People generally assume the risk of using an unlicensed tradesperson is that the work will be bad. Often it is fine. The risk is what happens in the cases where it is not.

What you keep

Your consumer guarantees under the Australian Consumer Law apply regardless of whether the person was licensed. Being unlicensed is not an escape hatch — services must still be provided with due care and skill and be fit for purpose. That is genuinely worth knowing, because people often assume they have no rights at all.

What you lose

The compliance certificate, which an unlicensed person cannot issue. That gap follows the property.
Access to state warranty or indemnity schemes, which generally only cover work done by licensed contractors.
The regulator's disciplinary leverage. A licensing body can act against a licence; it has far less hold over someone who never had one.
Insurance. An unlicensed operator frequently carries none, so a judgment against them may be uncollectable.
Practical traceability. Licensed contractors are on a register with an address. Unlicensed ones are often a phone number that stops answering.

Your own insurance

This is where it becomes expensive. If unlicensed electrical or plumbing work causes a fire or a flood, an insurer will examine how the work was performed. Outcomes vary with the policy and the circumstances, and it is not automatic that a claim is refused — but it is a materially worse position than holding a certificate from a licensed contractor, and the amounts involved are large.

If it has already happened

Have the work inspected by a licensed tradesperson in the same trade, and get their assessment in writing.
Deal with anything unsafe first. Electrical and gas defects are not matters to negotiate about while they remain live.
Report it to your state regulator. It is the mechanism that exists, and it also creates a record if you later need one.
Keep every payment record and message. Your claim against the person is not extinguished by their lack of a licence.
Tell your insurer if the work is the kind they would need to know about. Discovering it later is worse than disclosing it now.

Checking a licence takes about a minute and is free in every state. It is the highest-value minute available anywhere in this process — and worth noting that 90.2% of the 36,230 businesses measured here do not publish even an ABN, so the habit of asking is one worth forming.

Common questions

Do I have to pay an unlicensed tradesperson?: It depends on the state and the work. Some jurisdictions restrict an unlicensed contractor's ability to enforce payment for work that required a licence. That is not a licence to refuse payment for work properly done, and the safe course is to get advice from your state consumer body rather than simply withholding.
Will my insurance be void if unlicensed work caused damage?: Not automatically, and it depends on your policy and the facts. Insurers do examine how work was performed when it contributed to a loss, and unlicensed work in a regulated trade is a significantly weaker position than certified work. Disclose it rather than hope it does not come up.
How do I check whether someone is licensed?: Ask for the number and search it on your state's register — NSW Fair Trading, the VBA and Energy Safe in Victoria, QBCC in Queensland, Building and Energy in WA, CBS in South Australia, CBOS in Tasmania, Access Canberra in the ACT, or the NT registers. Each state guide on this site links to the right one.

What unlicensed work actually costs you