Homeless woman happy to sit in tree (3,4)
I believe the answer is:
bag lady
'homeless woman' is the definition.
(I've seen this before)
'happy to sit in tree' is the wordplay.
'happy' becomes 'glad' ('glad' can be similar in meaning to 'happy').
'to sit in' means one lot of letters goes inside another.
'tree' becomes 'bay' (bay is a kind of tree).
'glad' inserted into 'bay' is 'BAG LADY'.
(Other definitions for bag lady that I've seen before include "homeless person" , "Homeless female" , "Homeless individual" , "street-walker" , "Vagrant" .)