Finance Minister Mathias Cormann says because Vikki Campion was a staffer for National Party ministers, decisions relating to her employment were made by the coalition's junior partner.
Ms Campion, a former journalist, was initially a media advisor in the deputy prime minister's office before working for cabinet minister Matt Canavan.
When Senator Canavan stepped down from the front bench awaiting a High Court ruling on his citizenship status, she shifted to the office of then-Nationals whip Damien Drum.
Media reports this week suggested Prime Minister Malcolm Turnbull was involved in approving those two appointments.
But Mr Joyce told AAP in a statement the Nationals were responsible for all staffing for the party's MPs.
He had had not discussed Ms Campion's employment with the prime minister or his staff, although the prime minister's office has an administrative role in informing the Department of Finance of changes, he said.
Senator Cormann says everything was appropriate.
"She's clearly somebody who is qualified to do the job and she was hired in certain positions based on merit and there's nothing really further to add," he told Sky News on Sunday.
"All of my advice is that everything was absolutely above board."
Asked if any special jobs had been created for a minister's girlfriend, he said:
"That is self-evidently not what happened."
Mr Turnbull has said he was not aware of any inappropriate spending of public funds relating to the affair.
Deputy Labor leader Tanya Plibersek said while the opposition did not want to cause further distress to Mr Joyce's family, it intended to keep asking questions about the use of taxpayer funds.
"Was this job necessary? Was there work to be done at this skill level? What was the case made for having to hire someone additional into those offices?" she asked on ABC TV.
"It might be that there is no case to answer here, but I think the deputy prime minister and the prime minister should be prepared to answer questions about taxpayer money."
