It is literally there so clubs do not have to put in a relegation wage reduction isn't it? Its a ridiculous amount they get for just being relegated!
Most clubs that go up do put in relegation clauses. The problem is to attract the players even with the clauses the wages are still more than what they would have paid if they hadn’t gone up.
Payments are made evenly across the Championship. The parachute payments come from the PL and paid to PL clubs only(just over a longer time).
Without parachute payments Premier League clubs would want to reduce the number of clubs relegated to 0.