There are two “combat” things to consider that should have been documented on your findings:
The first is combat related. This has been a requirement for awhile. Combat related is defined by title code as follows, per DoDI 1332.38:
E3.P5.2.2. Combat-related. This standard covers those injuries and diseases attributable to the special dangers associated with armed conflict or the preparation or training for armed conflict. A physical disability shall be considered combat-related if it makes the member unfit or contributes to unfitness and was incurred under any of the circumstances listed in paragraphs
E3.P5.2.2.1. through E3.P5.2.2.4., below.
E3.P5.2.2.1. As a direct result of armed conflict. The criteria are the same as in
paragraph E3.P5.1.2., above.
E3.P5.2.2.2. While engaged in hazardous service. Such service includes, but is not
limited to, aerial flight duty, parachute duty, demolition duty, experimental stress duty, and diving duty.
E3.P5.2.2.3. Under conditions simulating war. In general, this covers disabilities
resulting from military training, such as war games, practice alerts, tactical exercises, airborne operations, leadership reaction courses; grenade and live fire weapons practice; bayonet training; hand-to-hand combat training; repelling, and negotiation of combat confidence and obstacle courses. It does not include physical training activities, such as calisthenics and jogging or formation running and supervised sports.
E3.P5.2.2.4. Caused by an instrumentality of war. Incurrence during a period of war is
not required. A favorable determination is made if the disability was incurred during any period of service as a result of such diverse causes as wounds caused by a military weapon, accidents involving a military combat vehicle, injury, or sickness caused by fumes, gases, or explosion of military ordnance, vehicles, or material. However, there must be a direct causal relationship between the instrumentality of war and the disability. For example, an injury resulting from a Service member falling on the deck of a ship while participating in a sports activity would not normally be considered an injury caused by an instrumentality of war (the ship) since the sports activity and not the ship caused the fall. The exception occurs if the operation of the ship caused the fall.
If the unfitting condition is combat related, then the disability compensation is supposed to be tax free. It looks like your findings address the combat related issue.
The second “combat issue” is if the unfitting condition began or was aggravated in a combat zone or during a combat related operation. This is a geographical issue. It you hurt yourself playing basketball in Iraq, it would have incurred in a combat zone but would not be combat related. This relates to the 2008 NDAA provision in my post above. If your condition incurred in a combat zone, and it sound like yours did, then your severance pay would be based on no less than six years of service and your severance would not be subject to offset by VA compensation. This is a huge deal and it appears your IPEB finding did not address this issues and they very much need to before you end up getting screwed out of about $22,000. Ensure the PEB addresses this issue, in writing and properly codes your findings or else you may spend years trying to get it fixed.
The requirement for PEB’s to document the aspect of enhanced severance pay can be found on page 4 of the 13 march 2008 DoD DTM
https://www.hrc.army.mil/site/active/tagd/pda/DoD_DTM_Mar_2008.pdf
Note the codes on page 8 of this DTM. Do your findings have such a code?
Mike