It sounds as though this is a contractual obligation, unless there is anything in the contract that implies discretion of any sort. Is it defined by reference to final salary? You will need to start budgeting for this payment, ideally within your precept calculation for 2021/22, unless you have sufficient reserves to pay it now.
If this payment is not linked to your pension scheme or used to purchase an annuity, it is likely to be taxable in full. You may wish to seek guidance from HMRC on this, as the timing of the payment may affect the tax liability. Assuming it is taxable, it should be run through your normal payroll, rather than paid directly to the Clerk, otherwise the council might find itself liable for the tax at a later date.