diff --git a/.spacelift/config.yml b/.spacelift/config.yml
index 8bc8d32..b94571f 100644
--- a/.spacelift/config.yml
+++ b/.spacelift/config.yml
@@ -1,6 +1,9 @@
 version: 1
-module_version: 0.0.6
+module_version: 0.0.7
 
 tests:
   - name: System-assigned identity
     project_root: examples/system-assigned-identity
+
+  - name: Password authentication
+    project_root: examples/password-authentication
diff --git a/examples/bastion/main.tf b/examples/bastion/main.tf
index b173804..81d858e 100644
--- a/examples/bastion/main.tf
+++ b/examples/bastion/main.tf
@@ -2,7 +2,7 @@ terraform {
   required_providers {
     azurerm = {
       source  = "hashicorp/azurerm"
-      version = "=2.68.0"
+      version = "=3.61.0"
     }
 
     random = {
diff --git a/examples/password-authentication/README.md b/examples/password-authentication/README.md
new file mode 100644
index 0000000..52b8404
--- /dev/null
+++ b/examples/password-authentication/README.md
@@ -0,0 +1,38 @@
+# Private Worker with a User Assigned Identity
+
+This example shows how to provision a Spacelift private worker using an Azure VMSS, using a
+User-Assigned Managed Identity to grant the workers permission to manage your Azure subscription.
+It also creates a KeyVault to store the worker pool credentials in, and uses the user-assigned
+identity to grant the VMSS permission to those secrets.
+
+Using a user-assigned managed identity gives you more control than using a [system-assigned identity](../system-assigned-identity/README.md),
+allowing you to do things like provision secrets in KeyVault and grant the correct permissions
+before your scale set is created.
+
+**NOTES:**
+
+- When using a user-assigned identity, you need to pass the identity's `client_id`
+  to the Terraform provider via the `ARM_CLIENT_ID` environment variable when following the
+  [authentication instructions](https://registry.terraform.io/providers/hashicorp/azurerm/latest/docs/guides/managed_service_identity).
+- Although we're using KeyVault to store the secrets, please note that the Azure RM provider
+  stores the secret values in plain text in your state, so the usual warnings about treating
+  your state as a secret apply.
+
+## Usage
+
+To run the example, create a tfvars file with the following variables specified:
+
+```hcl
+admin_public_key = "<your-base64-encoded-ssh-public-key>"
+worker_pool_config = "<your-worker-pool-config>"
+worker_pool_private_key = "<your-worker-pool-private-key>"
+worker_pool_id = "<your-worker-pool-id>"
+location = "West Europe"
+```
+
+Now just initialise Terraform, and run an apply:
+
+```shell
+terraform init
+terraform apply -var-file myvars.tfvars
+```
diff --git a/examples/password-authentication/data.tf b/examples/password-authentication/data.tf
new file mode 100644
index 0000000..d2bfbdb
--- /dev/null
+++ b/examples/password-authentication/data.tf
@@ -0,0 +1,2 @@
+data "azurerm_client_config" "current" {}
+data "azurerm_subscription" "primary" {}
diff --git a/examples/password-authentication/group.tf b/examples/password-authentication/group.tf
new file mode 100644
index 0000000..a0b4f15
--- /dev/null
+++ b/examples/password-authentication/group.tf
@@ -0,0 +1,8 @@
+resource "random_pet" "this" {}
+
+resource "azurerm_resource_group" "this" {
+  name     = "rg-${var.application}-${random_pet.this.id}-${var.env}"
+  location = var.location
+
+  tags = local.tags
+}
diff --git a/examples/password-authentication/identity.tf b/examples/password-authentication/identity.tf
new file mode 100644
index 0000000..8e630e3
--- /dev/null
+++ b/examples/password-authentication/identity.tf
@@ -0,0 +1,14 @@
+# Create a user-assigned identity for the VMSS. This allows us to grant it permissions
+# over our subscription, as well as configure its access to KeyVault secrets.
+resource "azurerm_user_assigned_identity" "vmss" {
+  resource_group_name = azurerm_resource_group.this.name
+  location            = azurerm_resource_group.this.location
+  name                = "sp5ft-${var.worker_pool_id}"
+}
+
+# Uncomment the following resource to grant the VMSS instances access to your current subscription.
+# resource "azurerm_role_assignment" "vmss_contributor" {
+#   scope                = data.azurerm_subscription.primary.id
+#   role_definition_name = "Contributor"
+#   principal_id         = azurerm_user_assigned_identity.vmss.principal_id
+# }
diff --git a/examples/password-authentication/keyvault.tf b/examples/password-authentication/keyvault.tf
new file mode 100644
index 0000000..e830327
--- /dev/null
+++ b/examples/password-authentication/keyvault.tf
@@ -0,0 +1,57 @@
+# KeyVault names need to be globally unique, so we'll just generate a random ID with a specified prefix.
+resource "random_id" "keyvault" {
+  byte_length = 9
+  prefix      = "sp5ft"
+}
+
+resource "azurerm_key_vault" "this" {
+  name                       = random_id.keyvault.hex
+  location                   = azurerm_resource_group.this.location
+  resource_group_name        = azurerm_resource_group.this.name
+  tenant_id                  = data.azurerm_client_config.current.tenant_id
+  sku_name                   = "premium"
+  soft_delete_retention_days = 7
+
+  # Allow the user running the apply access to KeyVault. You may want to configure
+  # policies for other users/groups in your organization.
+  access_policy {
+    tenant_id = data.azurerm_client_config.current.tenant_id
+    object_id = data.azurerm_client_config.current.object_id
+
+    key_permissions = [
+      "Create",
+      "Get",
+    ]
+
+    secret_permissions = [
+      "Set",
+      "Get",
+      "List",
+      "Delete",
+      "Purge",
+      "Recover"
+    ]
+  }
+
+  # Grant the VMSS identity permission to download secrets.
+  access_policy {
+    tenant_id = data.azurerm_client_config.current.tenant_id
+    object_id = azurerm_user_assigned_identity.vmss.principal_id
+
+    secret_permissions = [
+      "Get"
+    ]
+  }
+}
+
+resource "azurerm_key_vault_secret" "worker_pool_config" {
+  name         = "worker-pool-config"
+  value        = base64encode(var.worker_pool_config)
+  key_vault_id = azurerm_key_vault.this.id
+}
+
+resource "azurerm_key_vault_secret" "worker_pool_private_key" {
+  name         = "worker-pool-private-key"
+  value        = base64encode(var.worker_pool_private_key)
+  key_vault_id = azurerm_key_vault.this.id
+}
diff --git a/examples/password-authentication/main.tf b/examples/password-authentication/main.tf
new file mode 100644
index 0000000..99a116b
--- /dev/null
+++ b/examples/password-authentication/main.tf
@@ -0,0 +1,59 @@
+terraform {
+  required_providers {
+    azurerm = {
+      source  = "hashicorp/azurerm"
+      version = "=3.61.0"
+    }
+
+    random = {
+      source  = "hashicorp/random"
+      version = "=3.1.0"
+    }
+  }
+}
+
+# Configure the Microsoft Azure Provider
+provider "azurerm" {
+  features {}
+}
+
+module "azure-worker" {
+  source = "../../"
+
+  admin_username = var.admin_username
+  admin_password = var.admin_password
+
+  # This custom configuration block logs into Azure, downloads the worker pool credentials
+  # from KeyVault, and then configures the environment variables the Spacelift worker will
+  # read them from.
+  configuration = <<-EOT
+    az login --identity
+
+    echo "Downloading worker pool credentials from KeyVault" >> /var/log/spacelift/info.log
+    az keyvault secret download --name "${azurerm_key_vault_secret.worker_pool_config.name}" \
+      --vault-name "${azurerm_key_vault.this.name}" \
+      --file "/tmp/worker-pool-config" 1>>/var/log/spacelift/info.log 2>>/var/log/spacelift/error.log
+
+    az keyvault secret download --name "${azurerm_key_vault_secret.worker_pool_private_key.name}" \
+      --vault-name "${azurerm_key_vault.this.name}" \
+      --file "/tmp/worker-pool-private-key" 1>>/var/log/spacelift/info.log 2>>/var/log/spacelift/error.log
+
+    export SPACELIFT_TOKEN=$(cat /tmp/worker-pool-config | base64 --decode)
+    export SPACELIFT_POOL_PRIVATE_KEY=$(cat /tmp/worker-pool-private-key | base64 --decode)
+
+    rm /tmp/worker-pool-config
+    rm /tmp/worker-pool-private-key
+
+    echo "Worker pool credentials configured" >> /var/log/spacelift/info.log
+  EOT
+
+  resource_group = azurerm_resource_group.this
+  subnet_id      = azurerm_subnet.worker.id
+
+  identity_type = "UserAssigned"
+  identity_ids  = [azurerm_user_assigned_identity.vmss.id]
+
+  worker_pool_id = var.worker_pool_id
+  name_prefix    = "sp5ft-user-identity"
+  tags           = local.tags
+}
diff --git a/examples/password-authentication/network.tf b/examples/password-authentication/network.tf
new file mode 100644
index 0000000..831f99b
--- /dev/null
+++ b/examples/password-authentication/network.tf
@@ -0,0 +1,15 @@
+resource "azurerm_virtual_network" "this" {
+  name                = "vnet"
+  address_space       = ["10.0.0.0/16"]
+  location            = azurerm_resource_group.this.location
+  resource_group_name = azurerm_resource_group.this.name
+  tags                = local.tags
+}
+
+# Create a subnet for our workers
+resource "azurerm_subnet" "worker" {
+  name                 = "worker"
+  resource_group_name  = azurerm_resource_group.this.name
+  virtual_network_name = azurerm_virtual_network.this.name
+  address_prefixes     = ["10.0.2.0/24"]
+}
diff --git a/examples/password-authentication/outputs.tf b/examples/password-authentication/outputs.tf
new file mode 100644
index 0000000..36bceab
--- /dev/null
+++ b/examples/password-authentication/outputs.tf
@@ -0,0 +1,3 @@
+output "identity_client_id" {
+  value = azurerm_user_assigned_identity.vmss.client_id
+}
diff --git a/examples/password-authentication/variables.tf b/examples/password-authentication/variables.tf
new file mode 100644
index 0000000..91a2a78
--- /dev/null
+++ b/examples/password-authentication/variables.tf
@@ -0,0 +1,43 @@
+locals {
+  tags = {
+    application = var.application
+    env         = var.env
+    region      = var.location
+  }
+}
+
+variable "admin_username" {
+  type    = string
+  default = "spacelift"
+}
+
+variable "application" {
+  type    = string
+  default = "sp5ft-user-identity"
+}
+
+variable "admin_password" {
+  type = string
+}
+
+variable "env" {
+  type    = string
+  default = "test"
+}
+
+variable "location" {
+  type    = string
+  default = "westeurope"
+}
+
+variable "worker_pool_config" {
+  type = string
+}
+
+variable "worker_pool_private_key" {
+  type = string
+}
+
+variable "worker_pool_id" {
+  type = string
+}
diff --git a/examples/system-assigned-identity/main.tf b/examples/system-assigned-identity/main.tf
index 958d649..224c59a 100644
--- a/examples/system-assigned-identity/main.tf
+++ b/examples/system-assigned-identity/main.tf
@@ -2,7 +2,7 @@ terraform {
   required_providers {
     azurerm = {
       source  = "hashicorp/azurerm"
-      version = "=2.68.0"
+      version = "=3.61.0"
     }
 
     random = {
diff --git a/examples/user-assigned-identity/main.tf b/examples/user-assigned-identity/main.tf
index 6918188..accff7b 100644
--- a/examples/user-assigned-identity/main.tf
+++ b/examples/user-assigned-identity/main.tf
@@ -2,7 +2,7 @@ terraform {
   required_providers {
     azurerm = {
       source  = "hashicorp/azurerm"
-      version = "=2.68.0"
+      version = "=3.61.0"
     }
 
     random = {