A company has decided to outsource the department while an employee is on LTD7

You probably will be or they’ll just leave you on the books.
The employer may have “forgotten” about you if they have an employment category like “permanent medical leave”.

I wouldn’t count on severance:

If it doesn’t say “severance” then it probably isn’t deductible.
I would send them an email after you get it just to make sure.
I would check everything but that is just me.

Best of luck.