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 or eligible for federal benefits, the department is required to either identify a suitable representative payee or apply to become the payee itself if no other options are available. The bill outlines the department's responsibilities when acting as the representative payee, including establishing an appropriate account for the child's benefits, notifying relevant parties of any decisions regarding the benefits, and providing financial literacy tools to the child before they leave custody.

Additionally, the bill explicitly prohibits the department from using federal benefits to cover the costs of the child's care, allowing the funds to be used only for unmet needs beyond the department's obligations. Upon termination of legal custody, any remaining federal benefit funds must be released to the child or their parent/guardian, depending on the child's age and emancipation 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.