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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 is to 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 ceases 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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