Hey, I actually work as a face painter for my day job (and also administration, but only because face painting is largely seasonal). We use nothing but Snazaroo, and we freely paint over eyes and lips. Rarely (a handful of children out of a few hundred) we'll get some eye irritation, but it's minor; they get teary-eyed for a minute and and then they're fine. Snazaroo is about as safe as it gets as far as face paint goes.
Only thing to watch out for is that the darker colours, particularly black, will stain. Grey freely washes off though.