diff --git a/components/org.wso2.carbon.identity.recovery/src/main/java/org/wso2/carbon/identity/recovery/password/NotificationPasswordRecoveryManager.java b/components/org.wso2.carbon.identity.recovery/src/main/java/org/wso2/carbon/identity/recovery/password/NotificationPasswordRecoveryManager.java
index 195414b47d..9afc423a52 100644
--- a/components/org.wso2.carbon.identity.recovery/src/main/java/org/wso2/carbon/identity/recovery/password/NotificationPasswordRecoveryManager.java
+++ b/components/org.wso2.carbon.identity.recovery/src/main/java/org/wso2/carbon/identity/recovery/password/NotificationPasswordRecoveryManager.java
@@ -589,7 +589,6 @@ public void updatePassword(String code, String confirmationCode, String password
     public User updateUserPassword(String code, String password, Property[] properties)
             throws IdentityRecoveryException, IdentityEventException {
 
-
         UserRecoveryDataStore userRecoveryDataStore = JDBCRecoveryDataStore.getInstance();
         UserRecoveryData userRecoveryData;
         try {
@@ -884,6 +883,9 @@ private void updateNewPassword(User user, String password, String domainQualifie
                         + "for the user: " + domainQualifiedName, e);
             }
             throw Utils.handleServerException(IdentityRecoveryConstants.ErrorMessages.ERROR_CODE_UNEXPECTED, null, e);
+        } finally {
+            IdentityUtil.threadLocalProperties.get().remove(AccountConstants.ADMIN_INITIATED);
+            IdentityUtil.threadLocalProperties.get().remove(AccountConstants.PASSWORD_SET_FLOW);
         }
     }
 
@@ -935,6 +937,14 @@ private HashMap<String, String> getAccountStateClaims(UserRecoveryData userRecov
             userClaims.put(IdentityRecoveryConstants.ACCOUNT_LOCKED_CLAIM, Boolean.FALSE.toString());
         }
 
+        // If the recovery scenario is ASK_PASSWORD, it indicates a password set flow.
+        // Hence, update the thread-local properties to specify that this is a password set flow.
+        if (RecoveryScenarios.ASK_PASSWORD.equals(recoveryScenario)) {
+            IdentityUtil.threadLocalProperties.get().put(AccountConstants.PASSWORD_SET_FLOW, true);
+        } else {
+            IdentityUtil.threadLocalProperties.get().put(AccountConstants.PASSWORD_SET_FLOW, false);
+        }
+
         // If the scenario is initiated by the admin, set the account locked claim to FALSE.
         if (RecoveryScenarios.ADMIN_FORCED_PASSWORD_RESET_VIA_EMAIL_LINK.equals(recoveryScenario)
                 || RecoveryScenarios.ADMIN_FORCED_PASSWORD_RESET_VIA_OTP.equals(recoveryScenario)
diff --git a/pom.xml b/pom.xml
index 91e7a26617..5f799d1d2e 100644
--- a/pom.xml
+++ b/pom.xml
@@ -700,7 +700,7 @@
         </carbon.identity.framework.imp.pkg.version.range>
 
         <!--Carbon Identity Extension Versions-->
-        <carbon.identity.account.lock.handler.version>1.9.4</carbon.identity.account.lock.handler.version>
+        <carbon.identity.account.lock.handler.version>1.9.5</carbon.identity.account.lock.handler.version>
         <carbon.identity.account.lock.handler.imp.pkg.version.range>[1.1.12, 2.0.0)
         </carbon.identity.account.lock.handler.imp.pkg.version.range>