all I can think of is talk to a professional, someone with experience dealing with children of addicted parents. Maybe they can give you tips or recommend a therapist or a counselor or someone? Is 8 too young to join some kind of group for kids with parents who are addicts? Can you talk to someone who is in charge of the mother's visitation rights and mention your niece's concerns?
Actually, I have one other bit of advice that you're already following: just be there for the kids. Continue to be the stabilizing (and GOOD) influence that you are and that they need and remind them you are on their side and will be there for them.
I'm so sorry this situation is what it is, and I hope improvement is on the horizon.
