diff --git a/ledger/eval/eval.go b/ledger/eval/eval.go
index c3eececc88..ba57ed1348 100644
--- a/ledger/eval/eval.go
+++ b/ledger/eval/eval.go
@@ -1632,13 +1632,15 @@ func (eval *BlockEvaluator) proposerPayout() (basics.MicroAlgos, error) {
 }
 
 // generateKnockOfflineAccountsList creates the lists of expired or absent
-// participation accounts by traversing over the modified accounts in the state
-// deltas and testing if any of them needs to be reset/suspended. Expiration
-// takes precedence - if an account is expired, it should be knocked offline and
-// key material deleted. If it is only suspended, the key material will remain.
+// participation accounts to be suspended. It examines the accounts that appear
+// in the current block and high-stake accounts being tracked for state
+// proofs. Expiration takes precedence - if an account is expired, it should be
+// knocked offline and key material deleted. If it is only suspended, the key
+// material will remain.
 //
-// Different ndoes may propose different list of addresses based on node state.
-// Block validators only check whether ExpiredParticipationAccounts or
+// Different nodes may propose different list of addresses based on node state,
+// the protocol does not enforce which accounts must appear.  Block validators
+// only check whether ExpiredParticipationAccounts or
 // AbsentParticipationAccounts meet the criteria for expiration or suspension,
 // not whether the lists are complete.
 //
@@ -1740,7 +1742,7 @@ func (eval *BlockEvaluator) generateKnockOfflineAccountsList(participating []bas
 					updates.ExpiredParticipationAccounts,
 					accountAddr,
 				)
-				continue // if marking expired, do not also suspend
+				continue // if marking expired, do not consider suspension
 			}
 		}
 
@@ -1750,7 +1752,7 @@ func (eval *BlockEvaluator) generateKnockOfflineAccountsList(participating []bas
 			continue // no more room (don't break the loop, since we may have more expiries)
 		}
 
-		if acctData.Status == basics.Online {
+		if acctData.Status == basics.Online && acctData.IncentiveEligible {
 			lastSeen := max(acctData.LastProposed, acctData.LastHeartbeat)
 			oad, lErr := eval.state.lookupAgreement(accountAddr)
 			if lErr != nil {
@@ -1882,6 +1884,9 @@ func (eval *BlockEvaluator) validateAbsentOnlineAccounts() error {
 		if acctData.MicroAlgos.IsZero() {
 			return fmt.Errorf("proposed absent account %v with zero algos", accountAddr)
 		}
+		if !acctData.IncentiveEligible {
+			return fmt.Errorf("proposed absent account %v not IncentiveEligible", accountAddr)
+		}
 
 		oad, lErr := eval.state.lookupAgreement(accountAddr)
 		if lErr != nil {
diff --git a/ledger/eval/eval_test.go b/ledger/eval/eval_test.go
index 6ff50de2cd..494341e859 100644
--- a/ledger/eval/eval_test.go
+++ b/ledger/eval/eval_test.go
@@ -1336,6 +1336,7 @@ func TestAbsenteeChecks(t *testing.T) {
 		crypto.RandBytes(tmp.StateProofID[:])
 		crypto.RandBytes(tmp.SelectionID[:])
 		crypto.RandBytes(tmp.VoteID[:])
+		tmp.IncentiveEligible = true // make suspendable
 		tmp.VoteFirstValid = 1
 		tmp.VoteLastValid = 1500 // large enough to avoid EXPIRATION, so we can see SUSPENSION
 		switch i {
@@ -1345,16 +1346,25 @@ func TestAbsenteeChecks(t *testing.T) {
 			tmp.LastProposed = 1 // we want addrs[2] to be suspended earlier than others
 		case 3:
 			tmp.LastProposed = 1 // we want addrs[3] to be a proposer, and never suspend itself
+		case 5:
+			tmp.LastHeartbeat = 1 // like addr[1] but !IncentiveEligible, no suspend
+			tmp.IncentiveEligible = false
+		case 6:
+			tmp.LastProposed = 1 // like addr[2] but !IncentiveEligible, no suspend
+			tmp.IncentiveEligible = false
 		default:
-			if i < 10 { // make the other 8 genesis wallets unsuspendable
-				if i%2 == 0 {
+			if i < 10 { // make 0,3,4,7,8,9 unsuspendable
+				switch i % 3 {
+				case 0:
 					tmp.LastProposed = 1200
-				} else {
+				case 1:
 					tmp.LastHeartbeat = 1200
+				case 2:
+					tmp.IncentiveEligible = false
 				}
 			} else {
-				// ensure non-zero balance for new accounts, but a small balance
-				// so they will not be absent, just challenged.
+				// ensure non-zero balance for the new accounts, but a small
+				// balance so they will not be absent, just challenged.
 				tmp.MicroAlgos = basics.MicroAlgos{Raw: 1_000_000}
 				tmp.LastHeartbeat = 1 // non-zero allows suspensions
 			}
@@ -1385,6 +1395,7 @@ func TestAbsenteeChecks(t *testing.T) {
 
 		switch vb.Block().Round() {
 		case 202: // 2 out of 10 genesis accounts are now absent
+			require.Len(t, vb.Block().AbsentParticipationAccounts, 2, addrs)
 			require.Contains(t, vb.Block().AbsentParticipationAccounts, addrs[1])
 			require.Contains(t, vb.Block().AbsentParticipationAccounts, addrs[2])
 		case 1000: