The proposed legislation, titled the "Federal Benefits for Children in State Custody Act," mandates that the Children, Youth and Families Department (CYFD) assess 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 the child's best interests are prioritized. The bill outlines the department's responsibilities when acting as a representative payee, including establishing an appropriate account for the child's benefits, notifying relevant parties of any decisions regarding the benefits, and providing annual accounting of the benefits' use.

Additionally, the bill explicitly prohibits the use of federal benefits to cover the costs of the child's care, allowing the department to utilize these funds only for unmet needs beyond its obligations. Upon the 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 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.