By Alison Cross, Senior Associate

The Australian Charities and Not-for-profits Commission (ACNC) has published an updated version of its PBI Commissioner’s Interpretation Statement (CIS), which took effect on 29 September 2025. The update follows significant consultation with the charity sector, legal professionals, and other advisers.

The CIS sets out how the ACNC determines whether an organisation qualifies as a PBI – a subtype of charity that has access to very valuable tax concessions (for example, income tax exemption, fringe benefits tax exemption and deductible gift recipient (DGR) status).

Because a PBI is not defined in legislation, the ACNC’s interpretation plays a pivotal role in its assessment of whether an organisation qualifies or not as a PBI.

Key changes in the updated CIS

Some of the most significant refinements in the CIS include:

1. Evolving definition allowed – The ACNC emphasises that the ordinary meaning of PBI will continue to evolve over time and that the ACNC takes a contemporary approach and will consider contemporary ways organisations look to relieve benevolent needs.
2. “Sufficiency of connection” test – The updated CIS clarifies that organisations whose activities give relief indirectly (for example, through advocacy or preventive activities) may still qualify as PBIs if there is a clear and sufficient connection between their activities and their benevolent purposes. This change was triggered in part by the outcome of Equality Australia Ltd v Commissioner of the Australian Charities and Not-for-profits Commission [2024] FCAFC 115.
3. Greater examples – The updated CIS includes more practical examples of how the ACNC will apply the CIS.

Implications for charities

For those charities or organisations seeking registration as a PBI or for those that currently hold PBI status, the updated CIS means they must assess their purposes and activities carefully to ensure that:

• their objects and constitution, more generally, reflect benevolent relief of poverty, sickness, destitution, helplessness, suffering, misfortune, disability, or distress;
• their activities are targeted at a sufficiently “appreciable section of the community” and not just a private or narrowly defined group;
• where the relief is indirect, there is a demonstrable and sufficient connection between what the organisation does and the benevolent relief it claims to provide; and
• they remain alert to the evolving nature of “benevolent relief” and ensure their operations reflect modern forms of relief as contemplated by the ACNC.

Why it matters

PBI status is highly valued because it often opens the door to tax concessions and other benefits. With the updated CIS, the ACNC is signalling a sharper focus on ensuring that status is only granted to organisations that meet its evolving interpretation, and that charities review their eligibility under the new guidance.