KHC/QHC should be regarded as Appointment badges, although it is now invariably a CF1 who gets it.
The "ration" at present is for the top 4 Chaplains in each Service to be Hon Chaplains, and when a vacancy occurs names are forwarded to HM. She has been known to check on suitability!
One vacancy in the Army used to be reserved for the TA when a TA Chaplain could progress beyond CF3, and he was then usually a CF2.
QHC badges are the same size as those appointed ADC,QHS, QHP, QHNS, etc to HM. There are those attached to the Royal Household who wear smaller cyphers, and I do not know how these "work".
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