Some of the compensation money being paid out to some Indian residential school survivors has brought more grief than good, according to several First Nations counsellors.

"All of sudden they have this lump sum of money they're utilizing in not so healthy ways,"

— Mary Teegee, Director Carrier Sekani Tribal Council Family Services

All former students of the schools are able to apply for the "Common Experience Payment" of $10,000, plus $3,000 for each year they attended school.

But Mary Teegee, the director of the Carrier Sekani Tribal Council Family Services in Prince George, said she's already heard similar stories about the compensation destroying lives.

"All of sudden they have this lump sum of money they're utilizing in not-so-healthy ways," Teegee told CBC News on Thursday.

"There's an individual, not long ago, that got his lump sum of money and was dead in six months," said Teegee.

Nancy Williams, a social worker with the Lake Babine Nation in B.C.'s Central Interior, told CBC News she is grateful residential school victims are being compensated, but said that for others, the money has already come and gone.

"Some of my band members spent their money on drugs and alcohol. Why was there no process in place for them to deal with that, before they were given any money?" she said.

'Back to square one'

Teegee also wonders if perhaps there may have been a better way to distribute the compensation rather than handing out cheques for thousands of dollars.

"Now they've used up the money, they're back to square one again. They're still dealing with the residential school syndrome," said Teegee.

"There should have been more thought, more consultation with survivors of residential schools. Why was there not those issues addressed at the forefront, those mental health issues?" she asked.

"We have been saying as a service agency and within our communities, and our chiefs and leaders have been saying this: we haven't had enough mental health services. We haven't had culturally appropriate services to help heal the generations of trauma caused by the legacy of residential schools," said Teegee.

The legacy of residential schools

Residential schools were established with the assumption that aboriginal cultures were inferior to Western European culture and unable to adapt to a rapidly modernizing society.

Students were taken from their parents and forced to attend the schools. They were also physically punished for speaking their first language or practising native traditions. The aim of assimilation meant devastation for those who were subjected to years of mistreatment.

Throughout the years, students lived in substandard conditions and endured physical and emotional abuse. There are also many allegations of sexual abuse. Students at residential schools rarely had opportunities to see examples of normal family life.

When students returned to their reserves, they often found they didn't belong and became ashamed of their native heritage. The skills taught at the schools were generally substandard; many also found it hard to function in an urban setting.

Acceptance of the Common Experience Payments releases the government and churches of all further liability relating to the Indian residential school experience, except in cases of sexual abuse and serious incidents of physical abuse.

Applications for the compensation are still being accepted until the fall of 2011. An estimated 86,000 former students are eligible for redress.

With files by Robert Doane