Theories of crime in economics focus almost exclusively on the roles of deterrence and incapacitation in reducing criminal activity building off the Becker-Ehrlich framework, with a long history of supportive empirical work. However, a large body of recent empirical evidence has shown that income support, such as welfare, can also play a role in crime reduction. This paper extends the Becker-Ehrlich frame to incorporate transfers and the notion of economic necessity. In the absence of income support or savings and if there is a level of consumption that a person believes is necessary, then this can result in large income effect on consumption that in turn leads to a backward bending labor supply curve. This implies that if a person's main source of income is crime or some other illegitimate activity that should be reduced, then increased deterrence (a higher expected sanction) may lead to an increase in criminal labor supply. We embed this framework in a model where criminal and legitimate activity can be substitutes or complements, individuals have heterogeneous wages in either market, and criminal activities vary in their social cost. We then characterize optimal deterrence, transfer, and wage subsidy policies as a function of the cost of funds, social cost of crime, and individual need. We find that optimal crime policy should vary with individual need, and couple transfers and deterrence, rather than treating each of them as distinct policy options with separate goals.