The Social Development says government has saved millions of rands after implementing the new social grant payment system.
The Department says the new system has helped to eliminate ghost grant beneficiaries.
"We have managed to save a lot of money from corruption that has been going on in the system of grants. Employees who have allegedly been corrupt and suspensions has happened," said Social Development spokesperson Lumka Oliphant.
The new system is run by Cash Paymaster Services (CPS) which received the R10 billion tender to administer social grants payments under controversial circumstances.
CPS is now responsible for distributing grants worth around R8 billion to more than 10 million beneficiaries for the next five years.
But losing bidders Allpay Consolidated has challenged the awarding of the multi billion rand contract to CPS.
It argues that the tender was unfairly awarded to CPS by the department.
Late year, Allpay Consolidated unsuccessfully challenged challenged the awarding of the bid in the North Gauteng High court.
The court ruled that there were irregularities in the supply chain management processes and declared the awarding of the tender to CPS as "illegal and invalid".
However, it did not order continued payment of social grants to be aborted or disrupted.
Allpay Consolidated has now taken the matter to the Supreme Court of appeal in Bloemfontein.
It wants the Appeal Court to set aside the North Gauteng High Court ruling.