diff --git a/cmd/limactl/copy.go b/cmd/limactl/copy.go
index 3d4ec4a77e9..038f0b395b8 100644
--- a/cmd/limactl/copy.go
+++ b/cmd/limactl/copy.go
@@ -48,10 +48,7 @@ func copyAction(cmd *cobra.Command, args []string) error {
 	if err != nil {
 		return err
 	}
-	u, err := osutil.LimaUser(false)
-	if err != nil {
-		return err
-	}
+
 	instDirs := make(map[string]string)
 	scpFlags := []string{}
 	scpArgs := []string{}
@@ -86,6 +83,10 @@ func copyAction(cmd *cobra.Command, args []string) error {
 			if inst.Status == store.StatusStopped {
 				return fmt.Errorf("instance %q is stopped, run `limactl start %s` to start the instance", instName, instName)
 			}
+			u, err := osutil.LimaUser(false, inst.LimaVersion)
+			if err != nil {
+				return err
+			}
 			if legacySSH {
 				scpFlags = append(scpFlags, "-P", fmt.Sprintf("%d", inst.SSHLocalPort))
 				scpArgs = append(scpArgs, fmt.Sprintf("%s@127.0.0.1:%s", u.Username, path[1]))
diff --git a/pkg/cidata/cidata.go b/pkg/cidata/cidata.go
index 71096c1de76..27ab1e60f30 100644
--- a/pkg/cidata/cidata.go
+++ b/pkg/cidata/cidata.go
@@ -25,6 +25,7 @@ import (
 	"github.com/lima-vm/lima/pkg/sshutil"
 	"github.com/lima-vm/lima/pkg/store/filenames"
 	"github.com/lima-vm/lima/pkg/usrlocalsharelima"
+	"github.com/lima-vm/lima/pkg/version"
 	"github.com/sirupsen/logrus"
 )
 
@@ -115,7 +116,7 @@ func GenerateISO9660(instDir, name string, y *limayaml.LimaYAML, udpDNSLocalPort
 	if err := limayaml.Validate(y, false); err != nil {
 		return err
 	}
-	u, err := osutil.LimaUser(true)
+	u, err := osutil.LimaUser(true, version.Version)
 	if err != nil {
 		return err
 	}
diff --git a/pkg/limayaml/defaults.go b/pkg/limayaml/defaults.go
index 8ac8c26c7bd..98fc6a82b4b 100644
--- a/pkg/limayaml/defaults.go
+++ b/pkg/limayaml/defaults.go
@@ -27,6 +27,7 @@ import (
 	"github.com/lima-vm/lima/pkg/ptr"
 	"github.com/lima-vm/lima/pkg/store/dirnames"
 	"github.com/lima-vm/lima/pkg/store/filenames"
+	"github.com/lima-vm/lima/pkg/version/versionutil"
 )
 
 const (
@@ -753,8 +754,10 @@ func fixUpForPlainMode(y *LimaYAML) {
 
 func executeGuestTemplate(format, instDir string, param map[string]string) (bytes.Buffer, error) {
 	tmpl, err := template.New("").Parse(format)
+	limaVersion := ReadInstLimaVersion(instDir)
+
 	if err == nil {
-		user, _ := osutil.LimaUser(false)
+		user, _ := osutil.LimaUser(false, limaVersion)
 		data := map[string]interface{}{
 			"Home":  fmt.Sprintf("/home/%s.linux", user.Username),
 			"Name":  filepath.Base(instDir),
@@ -771,9 +774,11 @@ func executeGuestTemplate(format, instDir string, param map[string]string) (byte
 }
 
 func executeHostTemplate(format, instDir string, param map[string]string) (bytes.Buffer, error) {
+	limaVersion := ReadInstLimaVersion(instDir)
+
 	tmpl, err := template.New("").Parse(format)
 	if err == nil {
-		user, _ := osutil.LimaUser(false)
+		user, _ := osutil.LimaUser(false, limaVersion)
 		home, _ := os.UserHomeDir()
 		limaHome, _ := dirnames.LimaDir()
 		data := map[string]interface{}{
@@ -1074,3 +1079,15 @@ func unique(s []string) []string {
 	}
 	return list
 }
+
+func ReadInstLimaVersion(instDir string) string {
+	limaVersionFile := filepath.Join(instDir, filenames.LimaVersion)
+	limaVersion := ""
+	if version, err := os.ReadFile(limaVersionFile); err == nil {
+		limaVersion = strings.TrimSpace(string(version))
+		if _, err = versionutil.Parse(limaVersion); err != nil {
+			logrus.Warnf("treating lima version %q from %q as very latest release", limaVersion, limaVersionFile)
+		}
+	}
+	return limaVersion
+}
diff --git a/pkg/limayaml/defaults_test.go b/pkg/limayaml/defaults_test.go
index 7571baa2c2f..aeaa725cade 100644
--- a/pkg/limayaml/defaults_test.go
+++ b/pkg/limayaml/defaults_test.go
@@ -14,6 +14,7 @@ import (
 	"github.com/lima-vm/lima/pkg/ptr"
 	"github.com/lima-vm/lima/pkg/store/dirnames"
 	"github.com/lima-vm/lima/pkg/store/filenames"
+	"github.com/lima-vm/lima/pkg/version"
 	"github.com/sirupsen/logrus"
 	"gotest.tools/v3/assert"
 )
@@ -53,7 +54,7 @@ func TestFillDefault(t *testing.T) {
 	assert.NilError(t, err)
 	limaHome, err := dirnames.LimaDir()
 	assert.NilError(t, err)
-	user, err := osutil.LimaUser(false)
+	user, err := osutil.LimaUser(false, version.Version)
 	assert.NilError(t, err)
 
 	guestHome := fmt.Sprintf("/home/%s.linux", user.Username)
diff --git a/pkg/limayaml/validate.go b/pkg/limayaml/validate.go
index 8eb719ede32..ceadec34f16 100644
--- a/pkg/limayaml/validate.go
+++ b/pkg/limayaml/validate.go
@@ -15,6 +15,7 @@ import (
 	"github.com/lima-vm/lima/pkg/localpathutil"
 	"github.com/lima-vm/lima/pkg/networks"
 	"github.com/lima-vm/lima/pkg/osutil"
+	"github.com/lima-vm/lima/pkg/version"
 	"github.com/sirupsen/logrus"
 )
 
@@ -117,7 +118,7 @@ func Validate(y *LimaYAML, warn bool) error {
 		return fmt.Errorf("field `memory` has an invalid value: %w", err)
 	}
 
-	u, err := osutil.LimaUser(false)
+	u, err := osutil.LimaUser(false, version.Version)
 	if err != nil {
 		return fmt.Errorf("internal error (not an error of YAML): %w", err)
 	}
diff --git a/pkg/osutil/user.go b/pkg/osutil/user.go
index 7474296bca3..4abc6114023 100644
--- a/pkg/osutil/user.go
+++ b/pkg/osutil/user.go
@@ -11,6 +11,7 @@ import (
 	"strings"
 	"sync"
 
+	"github.com/lima-vm/lima/pkg/version/versionutil"
 	"github.com/sirupsen/logrus"
 )
 
@@ -109,17 +110,23 @@ func call(args []string) (string, error) {
 	return strings.TrimSpace(string(out)), nil
 }
 
-func LimaUser(warn bool) (*user.User, error) {
+func LimaUser(warn bool, limaVersion string) (*user.User, error) {
 	cache.warnings = []string{}
 	cache.Do(func() {
 		cache.u, cache.err = user.Current()
 		if cache.err == nil {
-			if notAllowedUsernameRegex.MatchString(cache.u.Username) {
-				warning := fmt.Sprintf("local user %q is not a allowed (must not match %q); using %q username instead",
-					cache.u.Username, notAllowedUsernameRegex.String(), fallbackUser)
-				cache.warnings = append(cache.warnings, warning)
-				cache.u.Username = fallbackUser
-			} else if !regexUsername.MatchString(cache.u.Username) {
+
+			//	check if the username is blocked
+			if versionutil.GreaterThan(limaVersion, "0.23.2") {
+				if notAllowedUsernameRegex.MatchString(cache.u.Username) {
+					warning := fmt.Sprintf("local user %q is not a allowed (must not match %q); using %q username instead",
+						cache.u.Username, notAllowedUsernameRegex.String(), fallbackUser)
+					cache.warnings = append(cache.warnings, warning)
+					cache.u.Username = fallbackUser
+				}
+			}
+
+			if !regexUsername.MatchString(cache.u.Username) {
 				warning := fmt.Sprintf("local user %q is not a valid Linux username (must match %q); using %q username instead",
 					cache.u.Username, regexUsername.String(), fallbackUser)
 				cache.warnings = append(cache.warnings, warning)
diff --git a/pkg/osutil/user_test.go b/pkg/osutil/user_test.go
index 860f0a71db2..cd5df682558 100644
--- a/pkg/osutil/user_test.go
+++ b/pkg/osutil/user_test.go
@@ -9,7 +9,7 @@ import (
 )
 
 func TestLimaUserWarn(t *testing.T) {
-	_, err := LimaUser(true)
+	_, err := LimaUser(true, "")
 	assert.NilError(t, err)
 }
 
@@ -18,28 +18,35 @@ func validUsername(username string) bool {
 }
 
 func TestLimaUsername(t *testing.T) {
-	user, err := LimaUser(false)
+	user, err := LimaUser(false, "")
 	assert.NilError(t, err)
 	// check for reasonable unix user name
 	assert.Assert(t, validUsername(user.Username), user.Username)
 }
 
 func TestLimaUserUid(t *testing.T) {
-	user, err := LimaUser(false)
+	user, err := LimaUser(false, "")
 	assert.NilError(t, err)
 	_, err = strconv.Atoi(user.Uid)
 	assert.NilError(t, err)
 }
 
 func TestLimaUserGid(t *testing.T) {
-	user, err := LimaUser(false)
+	user, err := LimaUser(false, "")
 	assert.NilError(t, err)
 	_, err = strconv.Atoi(user.Gid)
 	assert.NilError(t, err)
 }
 
 func TestLimaHomeDir(t *testing.T) {
-	user, err := LimaUser(false)
+	user, err := LimaUser(false, "")
+	assert.NilError(t, err)
+	// check for absolute unix path (/home)
+	assert.Assert(t, path.IsAbs(user.HomeDir), user.HomeDir)
+}
+
+func TestLimaAdminUser(t *testing.T) {
+	user, err := LimaUser(false, "")
 	assert.NilError(t, err)
 	// check for absolute unix path (/home)
 	assert.Assert(t, path.IsAbs(user.HomeDir), user.HomeDir)
diff --git a/pkg/sshutil/sshutil.go b/pkg/sshutil/sshutil.go
index 302ebfdb794..6156e416a8a 100644
--- a/pkg/sshutil/sshutil.go
+++ b/pkg/sshutil/sshutil.go
@@ -19,8 +19,10 @@ import (
 	"github.com/lima-vm/lima/pkg/ioutilx"
 	"github.com/lima-vm/lima/pkg/lockutil"
 	"github.com/lima-vm/lima/pkg/osutil"
+	"github.com/lima-vm/lima/pkg/store"
 	"github.com/lima-vm/lima/pkg/store/dirnames"
 	"github.com/lima-vm/lima/pkg/store/filenames"
+	"github.com/lima-vm/lima/pkg/version"
 	"github.com/sirupsen/logrus"
 	"golang.org/x/sys/cpu"
 )
@@ -228,7 +230,13 @@ func SSHOpts(instDir string, useDotSSH, forwardAgent, forwardX11, forwardX11Trus
 	if len(controlSock) >= osutil.UnixPathMax {
 		return nil, fmt.Errorf("socket path %q is too long: >= UNIX_PATH_MAX=%d", controlSock, osutil.UnixPathMax)
 	}
-	u, err := osutil.LimaUser(false)
+	instName := filepath.Base(instDir)
+	inst, err := store.Inspect(instName)
+	limaVersion := version.Version
+	if err == nil {
+		limaVersion = inst.LimaVersion
+	}
+	u, err := osutil.LimaUser(false, limaVersion)
 	if err != nil {
 		return nil, err
 	}