"Why? Why?" Peggy asks Frank in the film.
"Why what?" Frank says.
"Why haven't you called Jo?" she says.
De Niro has praised Paquin's performance and contribution to the film in an interview with USA Today.
"She was very powerful and that's what it was," he said.
"Maybe in other scenes there could've been some interaction between Frank and her possibly, but that's how it was done. She's terrific and it resonates."
De Niro's comments come after Paquin herself took to Twitter to address rumours she was forced to appear in the film.
"Nope, nobody was doing any 'ordering,'" she said. "I auditioned for the privilege of joining the incredible cast of @TheIrishmanFilm and I'm incredibly proud to get to be a part of this film."
Paquin previously responded to the outrage over her small speaking role, in an earlier interview with the MailOnline.
"I think a lot can be said without words. I think sometimes a look is worth a thousand words and the internalised judgement that [Peggy] has passed on her father is not something that she would be able to verbalise, not at that stage of her life," she said.
"She'd need 20 years of therapy to be able to explain to him why he was a problematic parent. But it was really interesting, it was a bit of a challenge but one that was incredibly exciting for me."