Child Support

Laura • Married to my best friend and I am blessed to be able to be a stay at home Wifey and Mommy to 3 beautiful kids!
Here's my question.. My husband has 2  children from a previous marriage that I adore and they are my life along with their little brother that lives with us. We used to pay $ 893.00 a month and we were paying it directly to her she vouched for my husband for that year thru DOR and told us we could still do it that way which was a complete lie ( yes I know that's our fault for listening to her) Well she got mad at my husband and took him back to court and lied and said we never paid her for a year. So his CS got raised to $ 1,000 a month. It gets directly taken out of his check so she gets the $ by the 3rd of each month. Every time the kids come they are supposed to have clothes packed for our house, toiletries, hair cuts etc... That has not happened in 7 years we pay for haircuts because our oldest says he's getting made fun of we've had to buy underwear for him 2x this summer because he doesn't have any or he is forced to wear them dirty because his mother won't do laundry. We buy deodorant soap razors for him. We buy dresses for our daughter for her dance because if we don't she won't have it. The list goes on forever! My dilemma is my husband and I make enough $ not to be broke by the end of the month but time after time we are because my husband will break down and buy the stuff so in my eyes his ex sees that we will do it so she keeps doing it because we have always picked up the slack while she's wearing holliister and going on vacation. It's been causing quite a strain in our relationship plus it's taking away from our other child. I've asked my husband to please stop but he says "at least I know I can sleep at night knowing I did the right thing". Paying his CS on time is doing the right thing that's $500 per child! They play no extra curricular activities because she spends the CS on herself. I feel bad for the kids as well and we are talking her back to court but until then what do I do?!? 
Partying with child support money 
Her Moms room only pathetic! 
Can't buy basic necessities but can go on vacation... 
And let me add the worst part her sex offender brother is around our kids!