Druggy neighbor question (see inside).

I generally have an answer for just about any domestic or criminal question, but this situation has me confused as to what action I should take.

My neighbor is a drug addict. I have known her since she was a baby. She has two beautiful children. She cannot keep a job, since she steals money from fellow workers for her drug habit. She has had untold number of cars repossessed and she now is back home with her mother and father. Their family situation is explosive. Her parents have spent a lifetime of money for rehab for their daughter and rehab never worked. So, that’s out. She constantly wants to come visit us, because she states we are her “second family” and understands her. When she visits, we hide our checkbooks, money and prescription drugs. She has sticky fingers. I feel for her as basically she is a good person. Here is the main problem: Question: I have banned her from our house, since she stole money from her child’s piggybank to buy drugs. That was the last straw with me. Her grandparents are taking care of her children and her. This is a heavy burden for her parents. Did I make the right decision to ban her from my house? She has stolen cigarettes and lighters from us in the past, but no money. Do I need to notify Childrens Services of her addiction and her children? This is a toughy for me, since she has been a family friend for 35 years. She cannot hold a job and you can guess why.
Sorry for the long question, but I really need other peoples opinion as to what steps I should take now. Being a former cop has made this a very difficult decision for me and it’s different when it hits home.