diff --git a/ee/query-service/model/license.go b/ee/query-service/model/license.go
index b96f6737a33..d878eac8dd8 100644
--- a/ee/query-service/model/license.go
+++ b/ee/query-service/model/license.go
@@ -140,7 +140,7 @@ func NewLicenseV3(data map[string]interface{}) (*LicenseV3, error) {
 		return nil, err
 	}
 	// if license status is inactive then default it to basic
-	if status == LicenseStatusInactive {
+	if status == LicenseStatusInvalid {
 		planName = PlanNameBasic
 	}
 
diff --git a/ee/query-service/model/plans.go b/ee/query-service/model/plans.go
index cb9760180b1..6dbfa8ba562 100644
--- a/ee/query-service/model/plans.go
+++ b/ee/query-service/model/plans.go
@@ -21,7 +21,7 @@ var (
 )
 
 var (
-	LicenseStatusInactive = "INACTIVE"
+	LicenseStatusInvalid = "INVALID"
 )
 
 const DisableUpsell = "DISABLE_UPSELL"
diff --git a/frontend/src/AppRoutes/Private.tsx b/frontend/src/AppRoutes/Private.tsx
index 162ca5de6bc..87ad2bcc3a2 100644
--- a/frontend/src/AppRoutes/Private.tsx
+++ b/frontend/src/AppRoutes/Private.tsx
@@ -156,7 +156,7 @@ function PrivateRoute({ children }: PrivateRouteProps): JSX.Element {
 			const currentRoute = mapRoutes.get('current');
 			const shouldSuspendWorkspace =
 				activeLicenseV3.status === LicenseStatus.SUSPENDED &&
-				activeLicenseV3.state === LicenseState.PAYMENT_FAILED;
+				activeLicenseV3.state === LicenseState.DEFAULTED;
 
 			if (shouldSuspendWorkspace && currentRoute) {
 				navigateToWorkSpaceSuspended(currentRoute);
diff --git a/frontend/src/container/AppLayout/index.tsx b/frontend/src/container/AppLayout/index.tsx
index 78f8fa15646..ab73a3fbb7d 100644
--- a/frontend/src/container/AppLayout/index.tsx
+++ b/frontend/src/container/AppLayout/index.tsx
@@ -250,7 +250,7 @@ function AppLayout(props: AppLayoutProps): JSX.Element {
 		if (
 			!isFetchingActiveLicenseV3 &&
 			!isNull(activeLicenseV3) &&
-			activeLicenseV3?.event_queue?.event === LicenseEvent.FAILED_PAYMENT
+			activeLicenseV3?.event_queue?.event === LicenseEvent.DEFAULT
 		) {
 			setShowPaymentFailedWarning(true);
 		}
diff --git a/frontend/src/pages/WorkspaceSuspended/WorkspaceSuspended.tsx b/frontend/src/pages/WorkspaceSuspended/WorkspaceSuspended.tsx
index ed8894ffe76..e4dd11dc0b6 100644
--- a/frontend/src/pages/WorkspaceSuspended/WorkspaceSuspended.tsx
+++ b/frontend/src/pages/WorkspaceSuspended/WorkspaceSuspended.tsx
@@ -61,7 +61,7 @@ function WorkspaceSuspended(): JSX.Element {
 		if (!isFetchingActiveLicenseV3 && activeLicenseV3) {
 			const shouldSuspendWorkspace =
 				activeLicenseV3.status === LicenseStatus.SUSPENDED &&
-				activeLicenseV3.state === LicenseState.PAYMENT_FAILED;
+				activeLicenseV3.state === LicenseState.DEFAULTED;
 
 			if (!shouldSuspendWorkspace) {
 				history.push(ROUTES.APPLICATION);
diff --git a/frontend/src/types/api/licensesV3/getActive.ts b/frontend/src/types/api/licensesV3/getActive.ts
index e12af475e96..5e89b2a75e8 100644
--- a/frontend/src/types/api/licensesV3/getActive.ts
+++ b/frontend/src/types/api/licensesV3/getActive.ts
@@ -1,6 +1,6 @@
 export enum LicenseEvent {
 	NO_EVENT = '',
-	FAILED_PAYMENT = 'FAILED_PAYMENT',
+	DEFAULT = 'DEFAULT',
 }
 
 export enum LicenseStatus {
@@ -9,7 +9,7 @@ export enum LicenseStatus {
 }
 
 export enum LicenseState {
-	PAYMENT_FAILED = 'PAYMENT_FAILED',
+	DEFAULTED = 'DEFAULTED',
 	ACTIVE = 'ACTIVE',
 }