The proposed legislation, titled the "Federal Benefits for Children in State Custody Act," mandates the Children, Youth and Families Department to assess the eligibility of children in its custody for federal benefits within sixty days of their placement and annually thereafter. If a child is found to be receiving benefits, the department must either identify an appropriate representative payee or apply to become the payee itself if no other candidates are available. The bill outlines the department's responsibilities when acting as the representative payee, including establishing an account for the child's benefits, notifying relevant parties about any decisions regarding the benefits, and providing financial literacy tools to the child before they leave custody.

Additionally, the bill prohibits the use of federal benefits to cover the costs of the child's care, allowing the funds to be used only for unmet needs. Upon termination of custody, any remaining federal benefit funds must be released to the child or their guardian, depending on the child's age and status. The department is also required to submit an annual report detailing the number of children receiving benefits, the types of benefits, and how those benefits are managed.