E4.—(1) This paragraph applies to a person—
(a)who has at any time after 13th November 1978 ceased to hold a local government employment, and
(b)who when he ceased to hold that employment—
(i)was entitled to reckon an aggregate of one or more but less than 5 years' reckonable service and qualifying service, and
(ii)was incapable of discharging efficiently the duties of that employment by reason of permanent ill-health or infirmity of mind or body, and
(c)who did not cease to hold that employment in consequence of any such offence or misconduct as are mentioned in regulation C12(5), and
(d)who is not apart from this regulation entitled, whether by virtue of his having made a claim under regulation C12(7)(b) or otherwise, to any benefit under these Regulations, other than a return of contributions, and has not—
(i)received any return of contributions other than one in respect of which a payment was made under regulation E21(3) of the 1974 Regulations, or
(ii)been granted any gratuity under Part K, under Part T of the 1974 Regulations, under section 18 of the Act of 1953, or under any local Act, or
(iii)received an allowance under regulation E21 of the 1974 Regulations, and
(e)who if a return of contributions were made to him would receive a net amount smaller than that of an allowance calculated in accordance with paragraph (2).
(2) A person to whom paragraph (1) applies is, subject to paragraph (3), entitled to be paid an allowance (“an ill-health lump sum retiring allowance”) of an amount equal to—
(a)one twelfth of his pensionable remuneration multiplied by the length in years of his reckonable service, or
(b)three eightieths of his pensionable remuneration multiplied by the length in years of the total period he would have been entitled to reckon as reckonable service if—
(i)he had continued in local government employment until he had attained the age of 65 years, and
(ii)any added period payments had been completed,
whichever is the lesser amount.
(3) A person to whom paragraph (1) applies—
(a)may, notwithstanding that he is for the time being entitled to an ill-health lump sum retiring allowance, at any time before such an allowance is paid to him be granted a gratuity under Part K, and
(b)on being so granted a gratuity under Part K he shall cease to be entitled to an ill-health lump sum retiring allowance.
(4) In the case of a person falling within paragraph (1)(a) to (c) who has ceased to hold his employment after 20th December 1987, the appropriate administering authority are, without prejudice to any subsequent decision under regulation N5 or N6, to notify him in writing, within 3 months after the date on which he ceased to hold his employment, of the amount of the ill-health retirement grant to which he would, subject to paragraph (3), be entitled if he were and remained a person to whom paragraph (1) applies.