The Australian defence force is considering applying for the right to discriminate based on sex, after a non-binary gender cadet enrolled in its academy.

In a statement released late on Friday evening, the ADF clarified the exemption under consideration is limited to allowing the military to treat people of gender non-binary status less favourably.

The statement effectively rules out an earlier report in The Mandarin that the exemption could allow discriminatory treatment of all people based on sex, including discriminating against women on the basis of sex, pregnancy and relationship status.

According to a report in the Australian newspaper, a cadet who has enrolled at the ADF academy identifies as gender-neutral or gender X, an option available since the development of new government guidelines in 2013.

The ADF said that “only a very small number of ADF personnel have chosen to identify themselves [as gender X] to defence”.

In an earlier statement, a spokesman for the ADF said it was “currently considering the need for an exemption to the [Sex Discrimination Act 1984] and the guidelines due to the unique operational requirements of military service”.

The later statement says the ADF is considering an exemption with respect to gender X people only. It says the aim is “to ensure that military operations and training can be conducted effectively” and an exemption may be necessary “given the unique operational requirements of military service”.

“An essential part of this consideration is whether the ADF can practically ensure the welfare of individuals, meet its obligations regarding non-discrimination and achieve its military mission,” it said.

The ADF said it was finalising its policy and would consult the attorney general’s department.

Discrimination, defined as “less favourable treatment”, can be direct or indirect. Imposing conditions that indirectly treat people less favourably is also prohibited unless they are “reasonable in the circumstances”.

The act allows organisations to apply to the Australian Human Rights Commission to seek exemptions to the requirement not to discriminate.

Under the 2013 guidelines on recognition of sex and gender, people who identify as non-binary gender “may use a variety of terms to self-identify” their gender.

“Gender is part of a person’s personal and social identity. It ­refers to the way a person feels, presents and is recognised within the community,” the guidelines state.

According to the report in the Australian, the public service commissioner, John Lloyd, said the Australian Public Service Statistical Bulletin, which was conducted late last year, reported that seven public service employees had identified as gender X.

“The number of current employees who identify as gender X is likely to be under-represented, due to the recent implementation of the guidelines, and employees having to initiate the amendment to their gender in their personal record,” Lloyd reportedly said.

Guardian Australia contacted the Australian Human Rights Commission for comment.