Aid distributed during religious festival (7)
I believe the answer is:
holiday
'festival' is the definition.
(thesaurus)
'aid distributed during religious' is the wordplay.
'distributed' is an anagram indicator.
'during' is an insertion indicator.
'religious' becomes 'holy' (I've seen this in another clue).
'aid' anagrammed gives 'ida'.
'ida' put inside 'holy' is 'HOLIDAY'.
(Other definitions for holiday that I've seen before include "rest" , "Time off work" , "Vacation" , "given a break" , "jazz singer" .)