Severance is some amount of money or other benefits you can receive if you're laid off from your job. The amount of severance you can receive varies based on your employer. The primary purpose of severance is to help you bridge the gap until you can get a new job. So, if you're laid off, your employer has to provide you with severance, right?
Severance is a benefit your employer can provide, but there's no legal obligation to provide it. If severance benefits were part of your employee agreement or contract, you may be entitled to receive those benefits. However, be sure to read the fine print in your contract. Your employer may have specified a maximum amount you can receive. Also, the contract may outline conditions under which your employer isn't obligated to pay any severance, such as if you're fired or if the employer has declared bankruptcy. [source: FindLaw]
Another note about severance is that it may not be on your last paycheck. For instance, the law may allow you a few days to file a wrongful termination lawsuit, which might eliminate your ability to claim your severance benefits. This author experienced this in early 2009 when a mandatory 10-day wait for severance was just long enough to miss a pay cycle, resulting in almost a month before she received those benefits. Have some money saved up so that you're prepared for situations like this, even if you have a good severance agreement.