When an employee is asked to depart, the congregation might provide some form of separation pay. Sometimes congregations use the term "severance" when they are actually providing paid leave. From a payroll and benefits perspective, these are two very different options. Here are the two approaches:
Severance pay:
A staff member is no longer employed. They are off the payroll and can no longer receive employee benefits. Severance pay is provided in a single lump sum and often includes unused vacation pay and any additional monies the congregation wants to provide. Additional monies might be "x" weeks of salary in recognition of service, a goodbye "gift" (still taxable!), or additional payments that the employee could use to continue their health insurance thru COBRA. If the employee wants to continue to receive health insurance through a plan you offer (UUA or other group plan), they can go on COBRA. Note that Retirement Plan contributions cannot be made on severance pay per federal law.
Paid Terminal Leave:
Although relieved of all responsibilities, the staff member is still your employee thru a specific date. This is sometimes also referred to as Administrative Leave. The employee remains on payroll and would normally stay on all benefits (except professional expenses) just as if they were still actively working until their final separation date.
There are pros and cons to each option, for both the employer and the employee. It's especially important to be clear to all parties about the payroll and benefits end date.