The Secretary may, on behalf of the Commonwealth, enter into an agreement with an approved provider, under which:
(a) amounts equal to the fees payable by the approved provider for applications made under this Act are to be deducted from amounts of * residential care subsidy otherwise payable to the approved provider in respect of the residential care service specified in the agreement; and
(b) so far as amounts are so deducted, the approved provider ceases to be liable to the Commonwealth for payment of the fees.