Homeless person happy to occupy recess (3,4)
I believe the answer is:
bag lady
'homeless person' is the definition.
(bag lady is a kind of homeless person)
'happy to occupy recess' is the wordplay.
'happy' becomes 'glad' (similar in meaning).
'to occupy' means one lot of letters goes inside another (inserted letters occupy or enter the word).
'recess' becomes 'bay' (bay is a kind of recess).
'glad' placed within 'bay' is 'BAG LADY'.
(Other definitions for bag lady that I've seen before include "Homeless individual" , "homeless person" , "Homeless woman" , "Homeless female" , "Vagrant" .)