I agree that you need to talk with her, but before you do, get information about help that is available to her. Then, when you sit down to say that it is a hardship for you to keep giving her cash (because it IS a hardship -- you are a single parent and need your income), you can say in the same breath, "I've been doing some research on services that you're entitled to and places that can help out better than I can."
You don't say if she's living in a shelter, on the street, with friends or whatever. If she needs housing, find out about whatever services your city or county social services office can provide regarding finding housing. Some churches and housing charities run "transitional housing" to help homeless people get back on their feet and into real housing at least until they can find a job and begin to get their own housing.
And is her Social Security benefit a SS disability payment? Does the government consider her officially disabled due to her illnesses? If not -- she should get evaluated to see if she is indeed entitled to more SS benefit, if she is ill enough to qualify as disabled. Or there may also be state disability benefits to which she is entitled.
Consult the state and local and federal governments and especially the local social services agency. Charities like Catholic Charities often can direct the homeless to different kinds of help.
There are safety nets in place to help her IF she gets out and is assertive about pursuing them. They will not be perfect, will not fill every gap of income or housing, and may not be enough to keep her from being homeless. But helping her find those resources, printing out and handing her applications, maybe driving her to appointments with Social Security or with local government agencies, helping her fill out paper forms -- they would be real ways to help your friend if she will accept that help and (this is important!) IF she will not simply let you do it all FOR her.
So I'd have a list of services and help and might offer to help some with initial appointments. Tell her that though you know occasional cash helps her out, that is only a temporary fix; you are trying to put her in touch with longer-term solutions. You're not doing this to save yourself money; you're doing it because she's your friend.
And if you've already done these kinds of things, or she tends to refuse help, or has a "thing" about pursuing available help -- well, that's sad, but you at least tried. But stop giving her cash. Still, I would definitely tell her that you will pay for babysitting, of course.
