The federal government used a technical argument to disqualify an estimated 1,000 claims for compensation made by indigenous Canadians who were abused at Indian residential schools listed in the agreement negotiated to award them for their suffering.

It is a move that the people who signed the deal on behalf of former students denounce as a cash-saving measure by Ottawa – one that has created unequal restitution for survivors, depending upon the date they filed their claims and the location on the school grounds where the assaults occurred.

"The government should reverse this unfair decision and agree to pay compensation to these people," said Phil Fontaine, the former national chief of the Assembly of First Nations, who is himself a residential-school survivor and who launched the efforts to obtain redress.

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Residential schools, which were varying combinations of boarding facilities and educational institutions, were established in the 1800s and run by churches. Ottawa made attendance compulsory for indigenous children in a massive program aimed at assimilation.

Faced with complaints during the 1950s and 60s about the quality of education being delivered, the federal government took over the operation of about 58 of the actual schools, leaving only the residences under the control of the religious orders. This is known as the "administrative split."

The Indian Residential Schools Settlement Agreement between the government, the churches and the school survivors was implemented in 2007. Many of those who were abused gave up their right to sue the government in return for being able to participate in the Independent Assessment Process (IAP), which was created, as part of that agreement, to determine how much compensation they deserved. For three years, the issue of the administrative split was not raised at IAP hearings.

Then, in late 2010, Justice Department lawyers began arguing that schools listed in the settlement agreement ceased to be residential schools at the time the administrative split took place – and that any student who was abused after that point should be disqualified from receiving compensation unless the abuse occurred within the church-run residences. If a child was sexually or physically abused in a classroom, in a gym, or on a playground, the government lawyers argued, he or she should not receive payment for his or her suffering.

While some IAP adjudicators vehemently disagreed with the government's position, others started dismissing claims based on the administrative split. Those that were denied were returned to Daniel Shapiro, the chief adjudicator of the IAP, for review, and they sat there, some for several years, without resolution.

In April of last year, Rosemary Nation, a judge of the Alberta Court of Queen's Bench, tossed out the appeal of a woman whose case had been rejected by the IAP on the basis of the administrative split. The unidentified claimant had attended the Grouard school, on the north shore of Lesser Slave Lake, and her arm had been broken by a nun some time after 1957 when responsibility for the school was handed from the federal government to the province, which occurred in a handful of the roughly 58 cases.

Justice Nation determined that Grouard was not a residential school when the abuse took place. And she agreed with the government – over the objections of the claimant and her lawyers – that adjudicators had the right to determine what was, and what was not, a residential school.

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Once that decision was rendered, Mr. Shapiro dismissed the other claims affected by the administrative split – a number he estimated in 2014 would exceed 1,000.

That means the end of a compensation claim for people such as Murphy Powderface, who was molested by a teacher at the Morley school in Alberta in the 1960s. "After I got denied again, I got more depressed," said Mr. Powderface, who said he has made several suicide attempts as a result of the abuse. "It still affects me."

Mr. Shapiro said in an e-mail to The Globe and Mail that his adjudicators are bound by the Alberta decision.

"Our adjudicators are independent from Canada and other parties in the [agreement], and are very diligent in assessing all of the submissions and evidence brought before them in hearings under the IAP," wrote Mr. Shapiro. "I believe that all claims are dealt with in a fair and impartial manner."

Still, chiefs who attended a special assembly in Gatineau, Que., in December asked Perry Bellegarde, the National Chief of the AFN, to call a meeting of the parties to the settlement agreement to "deal with the injustice being perpetrated against survivors affected by the illegitimate actions of the office of the chief adjudicator."

Charlie Angus, the NDP critic for indigenous affairs, said the Independent Assessment Process is the only legal process he has heard of that was set up and administered by the defendant. "The IAP has opted to side with weasel words from government lawyers over abiding by the spirit and promise of the residential-school apology," said Mr. Angus. "This is a travesty."

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Kathleen Mahoney, who represented the AFN during the settlement talks, said she and her fellow negotiators never intended to give IAP adjudicators the power to decide what constitutes a residential school. The eligible institutions are all spelled out in the settlement agreement, she said, and although there is a provision that allows schools to be added to the list, there is none that allows them to be taken away.

Nor did the government negotiators raise the issue of the administrative split at the time the agreement was being written, said Ms. Mahoney. "Arguably, they had that opportunity, but they would have been laughed out of the room."

Ms. Mahoney says the unfairness of the administrative-split decision is evident on many levels.

In families where two members were abused by the same person in the same way, one has been compensated because he or she filed his or her claim before 2010, while the other, who filed his or her claim later, has received nothing, she said. And "if one was assaulted in the residence, they would get compensated. But if the other was assaulted in the classroom – same abuser, same type of abuse, same time period – they are out of luck."

Common-experience payments, which are awarded to any former student of a residential school, regardless of whether abuse occurred, are still being paid to people whose claims under the IAP have been denied because of the administrative split – so the institutions are considered residential schools for one purpose but not the other, said Ms. Mahoney.

In addition, she said, even though Mr. Shapiro used the Grouard decision to justify throwing out all of the other claims affected by the administrative split, "Grouard is quite different on its facts" from the other cases. While Grouard was handed over to the province, most of the other schools that were split from the church-run residences continued to be run by the federal government.

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Throwing out all of the administrative-split cases, said Ms. Mahoney, "does undermine and contradict the agreement, which is a massive investment in reconciliation."

Rod Soosay, a social worker at the Samson Cree First Nation who helps abuse claimants with their applications, said he has worked with many people who have had their IAP claims denied because of the administrative split.

"One lady I am dealing with right now had her IAP hearing and totally believed she would get something. She was devastated," said Mr. Soosay. The government, he said, "are a bunch of hypocrites. It's like apologizing in advance for slapping you in the face."