Dumpier person in illicit occupation (8)
I believe the answer is:
squatter
This clue is a double definition.
'dumpier' is the first definition.
(dumpy can mean squat or short)
'person in illicit occupation' is the second definition.
(someone occupying a building illegally)
(Other definitions for squatter that I've seen before include "One occupying disused building or land" , "Person occupying property without legal right" , "illegally occupying property" , "Someone occupies land illegally" , "one has room for nothing" .)