Paragraph 1

There shall be deducted from the amount of the annual allowance payable at the material date to the entitled officer an amount calculated in accordance with the formula—

$$A\times B\times DorE\text{(whichever is the lesser);}$$

and

where a lump sum has been paid in respect of the further employment, there shall be deducted from the annual allowance an additional amount calculated in accordance with the formula—

$$A\times C\times D\times orE\text{(whichever is the lesser).}$$