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Meaning you can't retire abroad and receive your pension? How many months out of year do you have to reside in Australia?

If you’re out longer than a few months they cut your payout severely. Some friends sailing with us had to fly back every few months and check in.

So any pensioners planning to retire to SE Asia because of the lower cost of living are screwed.

This is incorrect. If you are overseas more that a few months, some of the extra's are cut, but not the basic amount.

Lots of Australian retirees live in Asia.

It's possible your friends had not lived in Australia long enough to fully qualify.