L3.—(1) If, as a result of an incapacity which is likely to be permanent caused by the injury or disease, a person to whom this Part applies ceases to be employed in a relevant employment (whether or not it is the same employment as that in which the injury or disease was sustained or contracted) he shall be entitled to an annual allowance.
(2) The allowance is to be paid by the relevant body and is to be of such amount as the body may from time to time determine.
(3) The relevant body may suspend or discontinue the allowance if the person becomes capable of working again.
(4) The allowance is not to be paid at a rate which exceeds 85% of the person’s annual rate of remuneration in respect of the employment when he ceased to be employed.
(5) In ascertaining for the purposes of paragraph (4) a person’s annual rate of remuneration in respect of the employment when he ceased to be employed—
(a)the annual rate of any fluctuating element of his remuneration is to be estimated by reference to an average taken over a representative period;
(b)the annual rate of any benefit in kind included in his remuneration is to be the estimated annual value of the benefit in kind at the date on which he ceased to be employed;
(c)if at that date he had no remuneration or his remuneration was reduced because of absence from duty, the annual rate is to be taken to be the annual rate which would have applied if he had not been absent;
(d)if at that date he was entitled to an allowance under regulation L4 by reason of a reduction in his remuneration, whether as a result of the same or of some other injury or disease, the annual rate is to be taken to be the annual rate which would have applied if his remuneration had not been reduced;
(e)if his remuneration is retrospectively altered as a result of a pay award, the annual rate of his remuneration is to be based on the retrospective pay award; and
(f)if his remuneration is not calculated by reference to an annual rate but by reference to some other rate, the annual rate is to be derived from the applicable rate at the date on which he ceased to be employed.
(6) In determining the amount of the allowance the relevant body is to have regard to all the circumstances of the case, including the matters specified in regulation L8.