Public Benevolent Institution (PBI) status: ACNC sub-type, FBT exemption and DGR Item 1

What a PBI is

A Public Benevolent Institution (PBI) is a specific sub-type of charity registered with the Australian Charities and Not-for-profits Commission (ACNC) under the Australian Charities and Not-for-profits Commission Act 2012. The requirements for a PBI are detailed in the ACNC Commissioner's Interpretation Statement CIS 2016/03, which is based on the High Court’s *Perpetual Trustee* case. ACNC governance standards for charities outline broader obligations for registered charities.

To qualify as a PBI, an organisation must be established to provide benevolent relief to people in need. This need may arise from poverty, sickness, suffering, distress, misfortune, disability, or helplessness.

Following the *Hunger Project Federal Court* decision (2014), PBIs are not limited to providing relief directly. They may also deliver relief indirectly through affiliated entities. While advocacy or political activity can be part of a PBI's work, it must be incidental and not constitute a separate, independent purpose.

Tax concessions PBIs receive

PBIs are eligible for income tax exemption and GST concessions. These concessions are in addition to the other benefits available to registered charities. PBIs also receive the FBT exemption, rather than the FBT rebate available to other charities.

The FBT exemption for PBIs is subject to caps. For the 2026 FBT year, the cap is $30,000 of grossed-up taxable value per employee. An additional $5,000 grossed-up cap applies to salary-packaged meal entertainment and entertainment facility leasing benefits. ACNC reporting obligations must be met to maintain this status.

PBIs are automatically eligible for DGR endorsement under Item 1.1.1 of the table in s 30-15 ITAA 1997. Furthermore, PBIs may be eligible for state and territory concessions, such as payroll tax and land tax exemptions, although eligibility is determined by the rules of each individual jurisdiction.

Applying for and maintaining PBI status

To become a Public Benevolent Institution (PBI), an entity applies to the Australian Charities and Not-for-profits Commission (ACNC) for registration as a charity, selecting ‘PBI’ as the sub-type. This application requires the provision of governing documents and evidence of activities. The ACNC assesses the entity’s dominant purpose against the PBI test, noting that partial benevolent purposes are not sufficient for registration. ACNC external conduct standards outline expectations for registered charities.

Following successful registration as a PBI with the ACNC, the entity must then apply to the Australian Taxation Office (ATO) for both DGR endorsement and an FBT exemption. These are separate applications, and registration as a PBI does not automatically grant either.

Maintaining PBI status requires ongoing compliance. Registered PBIs are required to lodge the ACNC Annual Information Statement and, depending on size, provide audited or reviewed financial reports. Revocation of the PBI sub-type by the ACNC results in the loss of both DGR endorsement and FBT exemption from the relevant effective date.

PBI vs HPC and related sub-types

Public Benevolent Institution (PBI) status differs from other ACNC sub-types, particularly Health Promotion Charities (HPCs). HPCs share the same $30,000 FBT exemption cap as PBIs, but their activities are restricted to preventing or controlling disease in humans. Public and not-for-profit hospitals, conversely, receive a lower FBT exemption cap of $17,000 (grossed-up). ACNC governance standards for charities outline the requirements for all registered charities.

An entity can only register under one ACNC sub-type as its primary. Generally, PBI status is the more concessional option for human welfare bodies. This reflects the broader scope of activities permitted under the PBI definition compared to other sub-types.

Organisations can utilise group structures, where a PBI parent entity operates trading subsidiaries that do not themselves qualify for PBI status. The Australian Charities and Not-for-profits Commission (ACNC) has recently released guidance, through Commissioner's Interpretation Statement updates, clarifying how umbrella and umbrella-funded structures are assessed against the PBI test.