The proposed legislation, titled the "Federal Benefits for Children in State Custody Act," mandates that the Children, Youth and Families Department (CYFD) determine the eligibility of children in its custody for federal benefits within sixty days of their placement and annually thereafter. If a child is already receiving benefits, the department must identify or apply to become the child's representative payee, ensuring that no other suitable candidate is 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 of any decisions regarding benefits, and providing annual accounting of the benefits' use.

Additionally, the bill prohibits the use of federal benefits to cover the costs of the child's care, allowing the department to use these funds only for the child's unmet needs. 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. The legislation also requires the department to report annually to the legislative health and human services committee on the number of children receiving benefits, the types of benefits, and how those benefits are managed.