People in prison caught in debt trap

15 May 2018

Good Shepherd Australia New Zealand welcomes Financial Counselling Australia’s report Double Punishment: How People in Prison Pay Twice.

Launched on 15 May at Financial Counselling Australia’s 2018 Conference, the report states that the vast majority of people leaving prison are worse off financially than when they entered the justice system.

“This has devastating consequences for individuals, families and the wider community,” said Ms Sandy Milne, National Manager Financial Security, Good Shepherd Australia New Zealand.

One of the key findings of the report is that people in prison generally have low financial literacy and all have limited access to legal, financial and other supports. “While they’re in prison, their debts accumulate and their assets disappear,” added Ms Milne. “This traps people in a debt cycle that can be impossible to break out of. Many have been in remand and discharged without sentence, so their debt is system induced.”

We value the opportunity to contribute to this report. Its findings are consistent with our experience. Good Shepherd has provided financial counselling and capability building programs in prison for over 30 years, and we advocate for better support services for people in prison and the community. Education and skill building can significantly reduce the individual and social cost of non-violent offences.

Men and women who leave prison with high rates of debt experience high rates of recidivism. At a cost of $110,000 per annum to keep people incarcerated, we have to get better at preparing people for life after prison.

Good Shepherd works with men and women who have no place to live when they leave prison. They’re couch surfing while trying to recover property or get legal support for debts they shouldn’t have to pay. They get stuck in expensive short-term loans for basic household goods and end up pursued by debt collectors. Many people have multiple debts - or they’ve acquired debts such as car loans through partners - or they don’t know which debts are in their name. Women are more likely to have children to care for alone, which can impact their ability to service debts following prison.

With recidivism rates as high as they are in Australia [nearly 45 per cent of prisoners released in 2014-15 returned to prison within two years], we have to invest in programs in prisons so that men and women have a better chance of success reintegrating into the community.