7.—(1) Regulation 17A (General option to exchange part of pension for lump sum) is amended as provided by paragraphs (2) and (3).
(2) In paragraph (8) for “The option” substitute, “Subject to paragraphs (9) and (10), the option”.
(3) After paragraph (8), add—
“(9) If the pension is an ill-health pension under regulation 13A, the option under this regulation may only be exercised by giving notice in writing to the Department in the form required by the Department—
(a)where the member is awarded—
(i)a tier 1 pension under paragraph (3)(a) of that regulation, at the time of claiming that tier 1 pension,
(ii)a tier 2 pension under paragraph (3)(b) of that regulation, at the time of claiming that tier 2 pension; or
(b)before such later time as the Department specifies in writing.
(10) If the pension is a tier 2 ill-health pension under regulation 13B to be paid in place of a tier 1 ill-health pension under regulation 13A, the option under this regulation may only be exercised—
(a)in relation to the difference between the tier 1 pension that is replaced by the tier 2 pension in accordance with paragraph (3) of regulation 13B and the tier 2 pension to which the member becomes entitled under that paragraph; and
(b)by giving notice in writing to the Department in the form required by the Department—
(i)at the time of award of the tier 2 pension under that paragraph, or
(ii)before such later time as the Department specifies in writing.”.