1002. The Joint Medical Discharge Policy with regards to permanently downgraded personnel is:
The Armed Forces will discharge all those medically unfit for military service. However, the Armed Forces may retain those seriously injured, if they wish to stay, for as long as there is a worthwhile role or it is judged to be in the interest of the individual and the individual Service to which they belong.
The second part of this statement must be and seen to be- dependent on the outcome of a considered Medical assessment followed by an executive led employability assessment.
just got this of the army brief dated 2010 ref redundancy
Wounded, Injured or Sick Personnel. Redundancy must not be confused with the
medical employment policy explained in Service Instructions1 which may lead to the
discharge on medical grounds of individuals who fall below the minimum medical retention
standards. Individuals may be considered for redundancy regardless of their current medical
grading in accordance with the criteria set for redundancy; those who are graded
permanently below the minimum medical retention standard should be managed under the
appropriate Service Instructions and those who are above the minimum medical retention
standard should be considered under the terms of any redundancy scheme. Should
applicants or non-applicants selected for redundancy subsequently fall below the minimum
medical retention standard they may discharged through either medical or this compulsory
redundancy scheme but not both.2 The scheme applied to such an individual will be the
most financially beneficial to him or her. Soldiers who are made redundant are not prevented
from applying for compensation under the Armed Forces Compensation Scheme.
1. The footnote on page 4 is out of date as PAP 10 v2 has been superceded by PAP 10 v3.
2. The key point in the whole note in your case is :
" ...those who are graded permanently below the minimum medical retention standard should be managed under the appropriate Service Instructions ..."
Which means that as P7 MND (P) you fall below minimum retention standards so should be selected for medical discharge in accordance with the appropriate Service Instructions (PAP 10 v3) if your unit/cap badge are doing their job correctly.
It may be worth you doing some quiet investigations into which is the more favourable way to go and applying for redundancy if that's the best option. It may be however that should you indeed apply, it may focus the minds at APC and hasten your departure.
I'd suggest joining The Forces Pension Society who are well versed in all these matters and then asking the question(s) you need answers to.