diff --git a/matlab/dynare_config.m b/matlab/dynare_config.m
index 637d80ea747e373532cc83f5391aeec1d10705f0..5d24b70ace6afa16538890b990e23aa056898a07 100644
--- a/matlab/dynare_config.m
+++ b/matlab/dynare_config.m
@@ -90,8 +90,8 @@ if ~isoctave && matlab_ver_less_than('7.4')
     addpath([dynareroot '/missing/bsxfun'])
 end
 
-% ilu is missing in old versions of MATLAB and in Octave
-if isoctave || matlab_ver_less_than('7.4')
+% ilu is missing in old versions of MATLAB and in Octave < 4.0
+if (isoctave && octave_ver_less_than('4.0')) || matlab_ver_less_than('7.4')
     addpath([dynareroot '/missing/ilu'])
 end