At home with old grass (8)
I believe the answer is:
'grass' is the definition.
(grass can mean a police informant)
'at home with old' is the wordplay.
'at home' becomes 'in' ('I'm in' can mean 'I'm at home').
'with' says to put letters next to each other.
'old' becomes 'former' (I've seen this before).
(Other definitions for informer that I've seen before include "One telling" , "sneak" , "spy" , "Grass, nark, canary" , "stoolie" .)