The Government has said it would be "inappropriate and potentially unlawful" to withdraw or modify the Public Services Card (PSC), despite recent critical findings by the Data Protection Commissioner.
The future of the card was put in jeopardy, after Helen Dixon's office found it was illegal to process personal data, for use in transactions between a person and a public body, other than the department itself.
The regulator also ruled the scheme does not comply with the transparency requirements of the data protection acts, because the department provided inadequate information about the processing of personal data.
Minister for Social Protection, Regina Doherty and Minister for Finance Paschal Donohoe told the Cabinet that nothing in the report undermines or invalidates the use of any PSCs already in issue.
Following consultations with the Attorney General, they said they were "satisfied that the processing of personal data related to the PSC does in fact have a strong legal basis; the retention of data is lawful; and that the information provided to users does satisfy the requirements of transparency".
The ministers acknowledged that it may be necessary and appropriate for the matter to be referred to the courts for a definitive decision.
A Government official said it does intend to publish the full report by Ms Dixon on PSCs, but first wants to have a meeting with the Data Protection Commissioner.
A group of international privacy and technology experts sharply criticised the Government decision to appeal the Data Protection Commissioner's findings.
The Irish Council for Civil Liberties described the announcement of an appeal as "worrying and possibly unprecedented scenario" in which ministers seem intent on spending public money to challenge the Data Protection Commissioner's findings despite a two-year investigation.