Queenstown social services are calling for government support, saying they're buckling under mounting pressure.
More than 200 people continue to use the Civil Defence welfare system each day with thousands accessing support over the last three months.
Infometrics estimates close to 8000 people will lose their jobs in the Queenstown Lakes due to the impact of border closures. Most of them are migrants who can't return home or access government support.
Social services want the government to step in and lead them through an emerging humanitarian crisis.
They formed the Household Goods and Services Group to provide basic welfare support for residents in the district in the wake of Covid-19.
In a statement, the group said no one agency was set up to handle the level of demand for basic welfare support and deepening signs of despair.
Central Lakes Family Service social worker Heather Clay said fatigue was growing.
"We are exhausted, having worked near 24/7 for 12 weeks. The people we are assisting are now also exhausted, afraid and losing hope," Clay said.
"They need to be given the means to support themselves so they're less dependent on our services."
Happiness House manager Robyn Francis said the demand has continued to grow.
"We are bracing for further waves of redundancies and hardship as more businesses have to let migrant staff go due to immigration policy.
"While we are happy when Kiwis get jobs, we feel there has not been adequate provision made for migrants who, in many cases, are not able to return to their country of origin. Many are effectively stranded here, with no place to go," she said.
Volunteering Central senior coordinator Gillian White said their team of two have worked far beyond their usual hours to pitch in.
"It is clear that the welfare need and demands on our time will continue to be high for the foreseeable future. Working consistently long hours whilst juggling work, wellbeing, children, partners and secondary work and volunteer commitments has been a real challenge."
Now that New Zealand has returned to level 1, social services are grappling with the heightened demand and trying to balance their usual business.
Instead of the situation improving, Salvation Army Queenstown social support worker Hine Marchand said stress levels had increased.
"People have been in tears as they lose all hope and all ability to support themselves. There's only so much we can do to help. More and more people are finding themselves in this position," Marchand said.