Opinions....Am I Wrong?

So, as EVERYONE knows, I watch my nephew. I have been doing it since late July. So for about three months-ish. Now, if I was just a stay at home mom, who didn't need an income, I would of watched him for free. But since I run a dayhome, a home based BUSINESS I couldn't pull it off. If I was to keep him for free it would be losing anywhere between $500-$600 a month for my family.
Soooo I find out about this government program that will help parents pay a family member to be a care giver to their child. It took me almost two months of harassing my sister before, finally, when we were out and about I took her to the government building and had her get the forms.
We have to fill out all these papers, they need a copy of my ID, a bunch of signatures, yada yada yada. They tell her that she should get a back payment in the middle of October, then regular payments either right at the end of each month or the beginning of the next. She will be getting $400 a month.
Now, I have to sign a peice of paper every month saying that I am caring for Julian, and that I hereby acknowledge the income and will report it as such on any income tax papers. No problem.
Now...Heeeeeeres the kicker.
I watch Julian three days a week, 10 hour days. One of her pals watches him on the weekends because my business is closed on the weekends.
Today she comes over and gives me $300....not $400. I ask her 'didn't they give you the full $400?' and she says 'ya, but I had to pay Krystal $200 for Julians weekend care.' So I say, 'I need the full $400....because I have to pay taxes on the full amount. That would be $1200 a year I pay taxes on but don't get' To wich she replies, 'well, you only watch him three days a week...why should you get all the money?'
Normally, if this wasn't government issued and if I didn't have to pay taxes on it...I wouldn't be that upset about it. But I'm really upset. She just assumes that she can take $100 of the money the government gives her, for me, and do with it as she pleases? I sign paperwork, stating that she is paying me the money.
So after I firmly tell her again that 'no, I need the full $400...I'm sorry, but the money is intended for me and I have to pay on it' she tells me, all nonchalant, that she will see about getting me more money at the end of the month.
Um....at the end of the month I should get my first official $400 payment...PLUS the $100 she shorted me. Does she think I'm going to sign a peice of paper saying I got it if I didn't???
Plus, this weekend she is going on a 4 day holiday with her boyfriend, leaving her son in the care of the girl who watches him on weekends, and she is going to get smashed everyday. The cabin is free for her, but the food and booze arn't. So she can afford to travel six hours, pay for gas and food and booze, but she can't afford to pay the extra $100 out of pocket??
I don't want to be a bitch about it all. But it's like she doesn't get it. And if I don't sign the papers saying I got the money, she will get cut off and black listed from ALL subsidy programs offered by the Alberta government. Daycare subsidy, single parent subsidy, preschool subsidy....everything. So if I don't sign it it's not just a small thing.
But seriously, am I wrong here? Should I just eat the $1200 a year? In my dayhome, part time care....she get's 30 hours a week...is anywhere from $300 a month to $450....with her hours it would be closer to the latter. So the $400 from the government will do.....and if I need to send her packing, it won't be hard to find another kid to take Julians place. One that will actually bring me in a reliable income!