K.V.
I agree with the rent idea. Was there an estimate given on how long she would need to stay when she moved in? Remind her of that, "You said you only need a place for a couple of months and it's been 8 months." and go from there. My guess is she is just taking advantage, and being irresponsible (read, lazy). Then give her a time limit and if she passes it move her stuff to the curb. You don't want to hurt the kids, but you're not doing your kids any favors by continuing in this fashion. And yours are your first responsibility. Would it be worth it to you to pay her first months rent someplace just to get her out?