As a licensed home daycare provider I will tell you a rule of mine (and many providers I know) that I learned to always follow after an uncomfortable and stressful first few years doing childcare (13 years now). NEVER do childcare on a regular basis for friends, neighbors or relatives.
The occasional "help a relative out while they are on vaca or their provider is", or assist a neighbor in the same way deal is do-able...but I will never again enter into an arrangement with anyone I see outside of daycare prior to the daycare arrangement...nor if I can see their house/yard from mine.
As far as getting paid and continuing the arrangement? Well...you need to decide if its worth it to you to wonder whether you will actually get paid....and $20 for 2/3 kids all day is silly for you to agree to (I get $35 a day per child...but as I said I am licensed, degreed in Child Development, etc).
If you can financially afford to end the arrangement..tell her its just not working for you to do so many hours. If you are feeding 2 kids of hers in a full day (likely breakfast, lunch and maybe 2 snacks...????) you probably are making almost no money each day anyways. Maybe washing an additional load of dishes each day as a result (water, soap and time)...or paying for paper plates instead...more napkins/paper towels for hand washing or clean up of spills..running your vacuum and extra time each day perhaps...using a bit more toilet paper, etc.
I know it may sound nit-picky..but this is what I do for a living..and it DOES add up. The difference just in my electric and gas bill from the extra bodies in my house and laundry I do to wash bedding and bibs each week is huge..more TP, paper towels, laundry soap, hand soap, hand sanitizer..the water bill to clean everything... Consider that it all comes out of the $20 a day you are supposed to be getting.
Just my opinion.