The national chief of the Assembly of First Nations is rejecting calls from First Nations leaders in the Yukon to put restrictions on what residential school survivors do with their compensation payments.

As many as two dozen funerals have been held in the Yukon for former students who had recently received thousands of dollars in compensation from the federal government.

More than $27 million in compensation cheques has flowed into the Yukon since September.

National Chief Phil Fontaine said he does not believe the deaths can be linked directly to the compensation payouts, but instead are part of the much larger tragedy of high suicide and addiction rates among aboriginal Canadians.

Nyla Klugie of the Kwawnlin Dun First Nation Health Centre says the process of applying for compensation brings back painful memories for some. (CBC)

But leaders including Diane Strand, chief of Champagne and Aishihik First Nations, disagree.

Not everyone should receive the payments directly, Strand said, because some survivors have been so emotionally traumatized by what they experienced as children that they turn to drugs or alcohol.

"Some of these people just don't have the capability [to handle a large sum of money], and I really feel that sometimes the money is just basically, how do I say it, putting the last nail in the coffin," Strand said.

Nyla Klugie of the Kwawnlin Dun First Nation Health Centre agrees. Some survivors are not ready for the money and have difficulties handling it, she said.

"It's the memories," Klugie said. "It brings you right back to day one when you were abused. Some of them can accept it, and some of them think it's not a good thing — poison money, I guess you could call it."

For a few, she said, the process of applying for the money reopens old wounds.

"There are some people for whom it is blood money. It takes away their life, sucks the life out of them, then next thing you know, they're dead," Klugie said.

Yukon MLA John Edzerza also believes deaths can be linked to the payouts.

"I know when historical trauma is brought to life again, the first thing the person wants to do is drown in alcohol and get rid of it somehow," he said.

Jesse Dawson and her brother Howard both spent time at a residential school in Whitehorse in the 1970s. Last fall, she and her brother received compensation payments of about $20,000 each.

Old demons unleashed

Jesse used her money to bring members of her extended family home to Whitehorse for Christmas. But for her brother, she said, the payment unleashed old demons.

"It was just too much for Howard to deal with, and he started drinking," she told the CBC's Lynda Calvert. "After four years of not drinking, he fell hard. He drank and drank until he died."

Fontaine said the money belongs to the individual survivors and what they do with it is their business. He points out there is a 1-800 number that survivors can call for help, and counselling is available.

But Dawson said her brother never would have called the number. Few survivors trust federal institutions, she said, and Howard wouldn't even ask his family for help.

Last month, First Nations communities across the Yukon held a special day of prayer to acknowledge the recent deaths they believe are connected with the compensation for former students of Indian residential schools.