If my wife hit a lady from behind but the lady was driving on a suspended license, can she still sue us for money?

Yes, because your wife caused the accident.

Most states would allow an unlicensed driver to sue for injuries. Some states would not allow it. Check the law in your own state.

License has nothing to do with negligence.

Yes. The license suspension does not preclude the other driving from bringing a claim. However, if the other driver was driving without liability insurance, then the other driver would be limited to claiming only economic damages (per Civil Code Section 3333.4(a)) unless the case falls under one of the exceptions to the rule (set forth in Civil Code Section 3333.4(c)). 3333.4. (a) Except as provided in subdivision (c), in any action to recover damages arising out of the operation or use of a motor vehicle, a person shall not recover non-economic losses to compensate for pain, suffering, inconvenience, physical impairment, disfigurement, and other nonpecuniary damages if any of the following applies: (1) The injured person was at the time of the accident operating the vehicle in violation of Section 23152 or 23153 of the Vehicle Code, and was convicted of that offense. (2) The injured person was the owner of a vehicle involved in the accident and the vehicle was not insured as required by the financial responsibility laws of this state. (3) The injured person was the operator of a vehicle involved in the accident and the operator can not establish his or her financial responsibility as required by the financial responsibility laws of this state. (b) Except as provided in subdivision (c), an insurer shall not be liable, directly or indirectly, under a policy of liability or uninsured motorist insurance to indemnify for non-economic losses of a person injured as described in subdivision (a). (c) In the event a person described in paragraph (2) of subdivision (a) was injured by a motorist who at the time of the accident was operating his or her vehicle in violation of Section 23152 or 23153 of the Vehicle Code, and was convicted of that offense, the injured person shall not be barred from recovering non-economic losses to compensate for pain, suffering, inconvenience, physical impairment, disfigurement, and other nonpecuniary damages.

Yes so long as her vehicle was insured.

Your wife is liable for the damages, regardless of the license issue; which is a separate charge. The accident did not happen because of the license, it happen because of your wife's negligence.

Whether or not the other driver had a suspended license is irrelevant when figuring out who is liable for civil damages. It is presumed your wife was at fault. Turn the claim over to your insurance company and let them handle it.

Whether you have a license has no more to do with liability than having an ingrown toenail. The person at fault in causing an accident is the person at fault.

The fact that the lady was driving on a suspended driver license will not provide a defense to your wife.

Yes, she can still claim that your wife's negligence caused her damages.

She can sue.

Most probably yes, call your insurance or an attorney.