diff --git a/changelog/unreleased/36523 b/changelog/unreleased/36523
new file mode 100644
index 000000000000..1b8e8035694c
--- /dev/null
+++ b/changelog/unreleased/36523
@@ -0,0 +1,5 @@
+Bugfix: suppress warning when resetting user password with masterkey encryption
+
+When an admin wanted to reset user's password over the Users management page with masterkey encryption in place, a warning was displayed about data recovery not being available. The behavior has now been fixed.  
+
+https://github.com/owncloud/core/pull/36523
diff --git a/settings/Controller/UsersController.php b/settings/Controller/UsersController.php
index 24dbd19e2f63..81fb8ded4f86 100644
--- a/settings/Controller/UsersController.php
+++ b/settings/Controller/UsersController.php
@@ -186,6 +186,9 @@ private function formatUserForIndex(IUser $user, array $userGroups = null) {
 					// user also has recovery mode enabled
 					$restorePossible = true;
 				}
+			} else {
+				// masterkey encryption is active
+				$restorePossible = true;
 			}
 		} else {
 			// recovery is possible if encryption is disabled (plain files are