Penniless family seen in street (5)
I believe the answer is:
skint
'penniless' is the definition.
(I've seen this before)
'family seen in street' is the wordplay.
'family' becomes 'kin' (synonyms).
'seen in' is an insertion indicator.
'street' becomes 'st' (abbreviation).
'kin' put into 'st' is 'SKINT'.
(Other definitions for skint that I've seen before include "Having little money" , "Strapped for cash" , "Extremely poor" , "Without money (slang)" , "Stony broke" .)