''Do the crime, do the time,’’ they say. But often it isn't that simple.
Being incarcerated is not the only punishment faced by those who are convicted and jailed. Prisoners are often punished financially. It is almost impossible for them to do simple things such as cancelling direct debits for an electricity or gas service; cancelling leases on rental properties; or paying mobile phone bills. When they leave prison, they can be hit with unexpected debts.
But it doesn’t have to be this way. Consider the case of Jenny*, jailed over minor drug offences. Among her debts were a small loan for a car and lease contract for a fridge and computer. With no way of paying either debt and no support to ask for a hardship variation – a legal right that should be available to anyone who borrows money – Jenny quickly fell into arrears. Her car was repossessed and then sold for less than the loan amount, while a 'friend’ who was looking after her computer and fridge sold them, leaving Jenny with more debt and the threat of being charged with theft.
Robin was arrested over minor drug charges. He was remanded in custody, and had no way to break the lease on his rental property. Rental arrears mounted, as did the service charges for gas, electricity and water. Following his formal eviction, Robin’s furniture and household goods were seized, while his clothes and personal effects such as photographs and mementoes were discarded because they had no financial value. When Robin was released from jail he had significant debts and no personal belongings to help him rebuild his life.
In other documented cases, houses are lost because people have not had the support while in prison to access their legal rights, which include asking for payment moratoriums. Obtaining insurance if you have a criminal record is close to impossible, leaving homeowners at risk because they can’t get mortgage insurance or home and contents insurance. Skilled workers such as car mechanics can’t re-establish their businesses because they can’t get public liability insurance.
It is not just prisoners who pay a high price for this double punishment. Society does too, through the crimes committed so people can raise money to pay off debts, the cost of the resulting high recidivism rates (keeping a person in jail for 12 months is estimated at $110,000), and in the heavy reliance on taxpayer-funded support for social support services, including Centrelink benefits and emergency relief to name just two.
Nearly 20 years ago, when Anne Stringer wrote Prison and Debt: Does debt cause crime? for Queensland's Prisoners' Legal Service, 49 per cent of prisoners said they had committed a crime to repay a debt. Other research found that women who reported having debts when they went into prison had much higher rates of returning to prison (32 per cent vs 17 per cent). A 2003 NSW study found that 51 per cent of ex-prisoners had debts and those with debts were more likely to re-enter prison than those without debt. And recidivism rates in Australia are high, with 44.8 per cent of prisoners released during 2014-15 returned to prison within two years.
We need to do things differently. When a prisoner receives appropriate support - information and advocacy early on in their jail term from financial counsellors, among other professionals - they either don’t incur any debts or existing debts don’t escalate.
Early intervention is the key because when debts spiral out of control, the odds of a person successfully reintegrating into society fall dramatically. It makes no sense to set up prisoners to fail in their rehabilitation.
Financial Counselling Australia's recent report Double Punishment sets out the experiences of financial counsellors who work with prisoners. Financial counsellors advocate on behalf of prisoners with creditors to stop houses and cars being repossessed; they help prisoners access documentation to file tax returns on time to avoid penalty rates of interest being added; and they also educate people about their rights and responsibilities around credit and extend their financial capability.
All of this is done to help prepare prisoners for their return to a world that is often unrecognisable due to the passage of time. Such support is vital, especially given the research showing that many prisoners have backgrounds of low levels of literacy and numeracy and high levels of trauma.
Research suggests that a high percentage of prisoners have been victims of childhood sex abuse. An Australian Institute of Criminology study that tracked 2759 child sex abuse victims who were abused between 1964 and 1995 found they were almost five times more likely than the general population to be charged with an offence. Furthermore, some 60 per cent of prisoners are functionally illiterate or innumerate, while 60 per cent did not complete year 10 schooling. A Corrections research paper estimated that 42 per cent of male prisoners and 33 per cent of female prisoners in Victoria had an acquired brain injury (ABI). This compares with an estimated prevalence of ABI among the general population of just 2 per cent.
Colin's story is a perfect example of how the system can work. He came from a broken home, was made a ward of the state at eight years old, spent the next 10 years in a boys' home and had difficulties over the years with drug and alcohol addiction.
Colin got himself clean and into a full-time job. After being charged with a minor offence he was repeatedly assured by his lawyer that because he had a full-time job and it was a first offence he would receive a community-based order. Instead he was jailed for six months.
With a personal loan of $15,000 that he had always paid on time, Colin knew he had to act quickly. ''As soon as I was incarcerated I heard about the prison financial counselling service through the prison program support. My financial counsellor arranged for a six-month moratorium on my loan to buy me some time to get back on my feet when I was released.
"But without support from my financial counsellor I wouldn’t have had any hope. I would have defaulted on my loan, my credit report would have been smashed and then the punishment goes on and on.’’
Few prisoners have the wherewithal to write letters to creditors, fill in appropriate forms or self-advocate in regard to their debts. But the system itself is difficult to navigate even for the professionals. Everything has to be done on paper, because prisoners don’t have access to the internet, but paperwork gets lost very easily. Prisoners are often not even allowed access to pens or pencils. Prisoners are also moved around at short notice within the system.
Identity documents are the first step in tackling debts, but often prisoners have no documentation with them. If they do, they can’t keep the documentation in their cells due to the risk of fraud, but accessing it is time-consuming. And the debt keeps mounting.
The report points to numerous solutions, including adding the National Debt Helpline free call number to the list of free phone calls that prisoners can make; creditors and government agencies having central points of contact; a mandatory financial health check for people entering prison; training for other case workers about financial capability issues; and a toolkit of resources for families of people in prison about how to manage debt issues.
Dedicated funding for specialist prison financial counsellors is also a key. Access to basic no-fee bank accounts is vital, as is the automatic cancellation of phone contracts.
"A phone contract is based on the provision of a service," one financial counsellor said. "If a person can’t use that service because they are in jail, they shouldn’t have to pay for the service.’’
A database of which companies provide insurance to people who have been in prison would also be invaluable. Currently, financial counsellors can make more than 20 phone calls trying to find a company prepared to insure a person with a record.
But the power of the support provided by financial counsellors goes deeper than tackling financial issues; it also gives people hope when someone thinks they are worth helping and recognises the harm caused by debts. "He didn’t even treat me like a prisoner," one prisoner said of their financial counsellor. "He treated me like a real person with real concerns."
As Colin said: "Yes I did the wrong thing and I served my time, but I still need to have hope that I can get my life back on track. I feel so sorry for the guys who are in prisons that don’t have access to a financial counsellor. I was one of the lucky ones.’’
*Some names have been changed to protect privacy.
Elizabeth Minter, communications manager at Financial Counselling Australia, wrote the report "Double Punishment".