You absolutely need a lawyer.. and this is a very serious allegation.. and this does put your ability to be with your children at risk.  

Ultimately, the end result may not be what you want which is that you and your SO may need to take extreme measures to protect you.. like him living separately from you when he has his daughter for visitation.  Cameras in your home if she comes etc..

I pray that they are able to come to the truth.. I hope there were, in fact, no situations where you were alone with her in situations where the contact could have been misconstrued (dressing her for example... bathing her).   A step parent needs to be very careful.. especially in drama situations that they aren't in a compromising position.

Get yourself an attorney. And this will certainly change the dynamics of your "family." No way would I EVER be around that child alone again. Nor would my bio children be around her. What if she falsly accuses them?  Your SO should be concerned, also...he could be her next victim.

I don't play with these kinds of lies. As a survivor of childhood sexual abuse, it infuriates me when "false allegations" are used to hurt another person. You have way too much to loose here. I'd also ask my attorney to look into any protections you can put into place considering the BM has made her own false allegations against you. 

I'm sorry you are in this position. Take care of you and your kids.

Damn. Echo what has already been said: this is bad. Very bad. I'm so sorry. My SO's brother has a daughter who was coached by BM to do similar. I feel sorry for the kid but BM has effectively ruined her as a member of your family. Your SO bred with crazy and this is the result. There are no awards for parenting a stepkid whose BM is alive and vindictive, only punishments. 

I am so sorry to hear what has happened to you, and I agree with other posters, you need legal help, which it seems you are getting, and to put up VERY strong boundaries in future.  Like Rumplestiltskin says, BM has effectively ruined SD as a member of your family.   I encountered something not all that different when my stepdaughters were young.  BM accused my DH of abusing them and told him she had reported him to social services.  As, at the time, I worked in a public facing role not dissimilar to social services, I could not afford to be tainted with such allegations.  So I suggested he phone them immediately and when he did, they had never heard of BM or her daughters! It was all made up. 

From that point on, I made it a firm rule that I was NEVER alone with either of his daughters, not even for a minute.  It would just have been not worth it.  Then, in 2019, my older stepdaughter made up an allegation about her stepfather touching her bum inappropriately, (she was 24 at the time), almost leading to a divorce.  I believe this to have been a complete fabrication, but once these things have been said, you have to go through with the consequences.  I suggest you take all steps possible to protect yourself, no matter the consequences to your SD and her father. 

DH is allowing BM to cause these problems.   He must pick a side. He can not play middle man trying to please everyone and actually pleasing no one.  You must protect yout kids. Even if it meabs the end of this relationship. 

RED LINE

Better lawyer up and demand a forensic exam and interview of the child. Hopefully CPS/social services is already on this.   Your "partner" can put the money out for your attorney too. I would make HIM pay every freak'n penny. 

In the mean time, I would plan my exit and  drop this dude like a hot potato. None of this is worth loosing your job, your parents/siblings/friends/community and  the threat of jail etc.

Keep us updated, ok? 

I am so sorry you are dealing with this. I could never imagine being around that child again. Ever. She is dangerous. I don't know if you and your partner can navigate things in that way; if not, I'd exit the entire situation. These kinds of allegations, as others have mentioned, can put your custody of your own children in jeopardy and can certainly impact your livelihood. 
I wonder if a psychiatrist can evaluate the child and provide a report? 

I would be 100% out in this situation, lawyered up and ready to divorce. Nothing is worth losing my job and financial independence. Nothing is worth going to jail for. And if I had kids, NOTHING would be worth losing them. 

I would go scorched earth on BM. Get a lawyer, counterfile with CPS listing the facts of neglect in BM's home, file a defamation lawsuit against BM. Put an RO/PO on the SD keeping her out of your home and away from you and your kids. She is dangerous. Though she is definately the BM's pawn, this could cost you your own kids.

Zero tolerance for either BM or SD until SD ages out from under the CO when she reaches the are of majority. Even then, be very wary of this shit failed family spawn.

I am happy to hear that your family and DH are being supportive.

It seems like you are well prepared and have a strong support system around you.

We were interviewed once by CPS over allegations of neglect (which were untrue and just hyperbole of a young teen speaking to a mandated reporter). If I were to go through it again, next time I would ask to read any statement that the social worker read to me about the allegations before I responded to them. I feel that the last time I miss-heard what was said and miss-understood what we were being accused of. Thiis led me to probably over explain when trying to defend myself. 

I assume that your legal advice will cover this, but remember that the social worker is doing their job and they have to follow up on any allegations if there is reason to think a child might be at risk. So trying to be friendly and cooperative with them will make the process smoother. 

is a legal adviser someone who would have in a  criminal court case. represent . You need someone. a real attorney/ someone who goes to court to defend people.. To let you know your rights.  To advise you what to do.  To go to any legal interview with you,  to get any information the other side has.  ect.  This is not a joke. You can do jail time over this.. don't take it lightly please protect yourself. 
Unfortunately this is going to be a major set back in your marriage.  DH is Force to take a side , he can't play middle man trying yo keep everyone happy.  Is he going or side with you? Or his Ex.    
'Once BM Pulls this crap, it's no stopping her.  You must file a law suit against BM. For her doing this to your  character 

It's just a crummy thing being done to you .  No one need this crap.    BM  is a major contributor to this problem. She wants SD to stop all visitations with you and DH.  She is trying to split you two up.  You have to come back at BM.  You can not have her do this and suffer no consequences fir her actions..  This will mean or give BM open hunting season on you.   
'Something to think about in the future.  
'Is DH ready to give up contact with his DD.  Do day visitations away from home is going to get old really fast.  Also DD will get upset when you go on great vacation with out her.   Life is gone to change. 

Yes, I agree with everyone, that it's a serious allegation and that you should get legal advice, but having crossed paths with protection system many times over the years professionally, I expect that nothing will come out of it... I saw far too many cases that had far more evidence than someone's word, and the perps should have been locked up, but it never even got to being charged phase. 
You'll be just fine. Have a backup plan like everyone else suggested and never allow her back or near your children again, but I can't see this case going anywhere. Social services will see exactly what's going on here.

This time it appears your life wasn't destroyed, which is wonderful. But next time? My fear is for your own children. What if she accuses them next time?

It's one thing for an adult to deal with the stress of a horrific accusation, but a child? How could they handle being questioned by authorities while you stand by helplessly? If an accusation against your child became public knowledge it would destroy their childhood - what parent would allow their child to come to your house or allow them to go to theirs? And all of this would spill over to your other children. 

None of you should have contact with SD. Ever. If your husband can't fully accept that she is no longer a member of your family, that she can no longer come to your house, be part of holidays, family outings, family vacations, etc. then you have a choice to make.

Nothing happened ... this time.

She is going to represent a risk of  you losing your own children until she is no longer a minor and ... any statute of limitations expire.

She is a liar. A liar that took a shot at destroying you and your family. Never forget that and IMHO it is never forgivable. Not even considering she is a kid.  Never trust her, never let her into your home and your family again. Ever.

I wouldn't.  

She has ended any significant place in your lives and family. Daddy has to see her without you or your kids away from your home and lives.

IMHO of course.

I agree with the the others. She doesn't get back ...EVER. What she wants is entirely irrelevant.  (She wants to spend more time in your home than with BM? Sounds like BM wants more free time. )  She gave up her chances of sharing your home when she made those awful allegations. By the way, the fact that it's been 6 weeks and nothing official has happened does not mean it's over.

It might be worthwhile for your SO to let BM know about your upcoming wedding. If there's going to be drama, better to deal with it and get it over and done with as soon as possible, well before the event.

But if you allow SD in your home. And every 4 time BM starts something. They are going to think she is right.  SD can not be in your presence, never in your home. It's up to DH to back you up and basically stop contact with his DD or leave you and join the circus..  Because BM will have him jumping through hoops    Nothing you can do. It's up to your SO, there no compromise on this.   He can see his DD at McDonald for two hours a week. 

 You can not allow SD in your home any more for any time. She can not enter your home . BM starts something SD went to the bathroom and you Xxx.  They are going to think she is right eventually because you are not stopping it. SD can not be in your presence, never in your home. It's up to DH to back you up and basically stop contact with his DD or leave you and join the circus..  Because BM will have him jumping through hoops    Nothing you can do. It's up to your SO, there no compromise on this.   He can see his DD at McDonald for two hours a week. 

Bm will escalate this when you marry.  If she can't get to you she will direct her efforts towards DH.  He will be accused next.   You will have nothing but drama for the rest of your life.  Do you want your kids to live thru this ?  Sometimes love isn't enough.   You said DH takes the high road and doesn't want to fight back.  You can't be the only one to put up boundaries. He has to also.  
 

Look up the website  shrink4men.com and get some real advice for dealing with high conflict ex wives.  You need more knowledge about them.  

Well done for handling it all so far, but I was dismayed to hear you are considering letting SD back in your home - please don't!  At least not for a few years.  As others suggested, it will push BM's buttons when you wed her ex, and she will redouble her efforts to cause you both pain, probably by inciting her daughter to make fresh allegations.  Something similar happened when I married DH - NPD BM manufactured a crisis with her then boyfriend and tried to disrupt our wedding.  

Please consider my words. 

Your SD and her BM deliberately filed a false report that could've lost you your children, your home and your way of life. Repeat that ever time you waver. Because it will happen again and now there is a 'case' w/ your name on it. Which means if/when they lie again it will be a pattern, a pattern w/ you as the abusing party.

SD deliberately lied. 

BM deliberately lied. 

and now they want you to have her in your home, ready to lie about you or your kids again? she gets grounded - she will lie about you. She gets jealous - she will lie about you. Daddy doesn't buy/give/do what they want - THEY WILL LIE AGAIN. 

clean out her room, ship back her crap, all of it. Daddy can figure this out but you need to be clear, that little liar who willingly might've caused you to lose everything, cannot be trusted to be in your home. 

Do not let SD back to your home unless you want for your entire life to be ruined. Because that is what will happen. 

The first step is therapy. Ideally your sd should have some individual therapy. Then some family therapy perhaps initially just with her dad and then you brought in. 
 

This way it enables you to see if you can rebuild a relationship with her where you can trust her word. It will hopefully help her to reframe things in her mind if she has been manipulated into misremembering or misunderstanding the situation that led to her allegations. 
 

If therapy goes well then maybe you can consider more supervised contact with her and eventually an overnight visit with cameras in your home. 
 

I would not leave it years to try to rebuild this relationship, I think that is a recipie for resentments and misunderstandings to build substantially.

At the end of the day she is 8. I would give your relationship with her the opportunity to become positive again. Cautiously, slowly, with advice from professionals, but still starting that process sooner rather than later.