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12.—(1) This paragraph applies—
(a)where paragraph 7 has become applicable because the person died while in pensionable employment; or
(b)where he dies within 3 months after ceasing to be in pensionable employment without having made an election under paragraph 8 or 9,
and another person (“the pensioner”) is entitled under regulation E26 to a long-term pension in respect of him.
(2) Where this paragraph applies—
(a)the person shall be treated as having ceased to hold the employment when incapacitated;
(b)any election that could have been made under paragraph 8 or 9 may, within 3 months after the death, be made by the pensioner, or in the case of a child by a person acting on his behalf;
(c)if any payment due by virtue of such an election is not made within 3 months after the death the election ceased to have effect; and
(d)a terminal sum may be set off against such a payment only to the extent that the person entitled to it consents.
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