This bill prohibits the New Jersey Department of Children and Families (DCF) from using 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 any federal benefits, including Social Security and Veterans Administration benefits, must be conserved in an account at a federally insured financial institution for the child's future use or utilized for unmet needs that exceed the State's maintenance obligations. The bill also requires DCF to notify the child, their parents or legal guardians, and the Family Part of the Chancery Division of the Superior Court when using these benefits.

Additionally, the bill outlines the responsibilities of DCF when appointed as the representative payee for a child's federal benefits, including applying for benefits on behalf of the child and providing annual accounting of the benefits' use. 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. The act is set to take effect twelve months after enactment, with provisions for anticipatory administrative actions to facilitate its implementation.