Refer a Friend is compatible with the WooCommerce Subscriptions plugin.
To make it work, after setting up the plugin per the step-by-step guide you can find on this link: Setting up WooCommerce Refer a Friend plugin, you need to enable the WooCommerce subscription option under the plugin’s general settings and you are done – coupons will be automatically applied to customers on their next payment.
So, once your customer has referred a friend to your store and earned a coupon, that coupon value will be automatically deducted from their next renewal. If the amount of the coupon equals the subscription price, their renewal will be free. Giving 1 free month (or whatever subscription period you have) in exchange for getting a new person signed up is a great way to increase your site subscription base.
This feature works with payment gateways that support recurring total modifications. Read more about them here: https://docs.woocommerce.com/document/subscriptions/payment-gateways/#advanced-features