This bill prohibits the New Jersey Department of Children and Families (DCF) from using any federal benefits received by a child in out-of-home placement to reimburse the State for the costs associated with the child's maintenance. Specifically, it mandates that if DCF is appointed as the representative payee for a child's federal benefits, those benefits must be conserved in a federally insured financial institution account for the child's future use or utilized for unmet needs that exceed the State's maintenance obligations. The bill emphasizes the importance of notifying the child, their parents or legal guardians, and the Family Part of the Chancery Division of the Superior Court regarding the use of these benefits.

Additionally, the bill requires DCF to determine the eligibility of children in its custody for federal benefits and to apply for such benefits on their behalf. It also stipulates that DCF must provide an annual accounting of the use of these benefits to the child and their guardians. The Commissioner of Children and Families is tasked with applying for any necessary federal waivers to implement the bill's provisions and ensure continued federal reimbursement for child welfare services. Overall, the bill aims to protect the financial resources of children in out-of-home placements, ensuring they are used for their best interests rather than offsetting State costs.