The Ministry of Social Development is challenging a decision that deemed its use of false names and signatures in legal documents was unlawful.
The practice was labelled "repugnant to the most fundamental concept of justice" in a stinging tribunal ruling released this week.
Chief executive Brendan Boyle previously defended the use of pseudonyms, saying health and safety was critical to staff dealing with "our most volatile clients".
The ruling, from the little-known Social Security Appeals Authority, revealed despite warnings - and a 2016 undertaking that the practice of using false names during benefit review hearings would stop - the MSD had continued to use false names.
Boyle was found to have filed a further seven documents containing fake names and signatures since he was told not to, the authority said.
