diff --git a/packages/SystemUI/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandler.java b/packages/SystemUI/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandler.java
index f5575a25aec30..f769a23554099 100644
--- a/packages/SystemUI/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandler.java
+++ b/packages/SystemUI/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandler.java
@@ -44,6 +44,7 @@ import com.android.systemui.statusbar.phone.panelstate.PanelExpansionChangeEvent
 import com.android.wm.shell.animation.FlingAnimationUtils;
 
 import java.util.Optional;
+
 import javax.inject.Inject;
 import javax.inject.Named;
 
@@ -153,8 +154,6 @@ public class BouncerSwipeTouchHandler implements DreamTouchHandler {
 
     private void setPanelExpansion(float expansion, float dragDownAmount) {
         mCurrentExpansion = expansion;
-        mCentralSurfaces.ifPresent(centralSurfaces -> centralSurfaces.setBouncerShowingOverDream(
-                mCurrentExpansion != KeyguardBouncer.EXPANSION_HIDDEN));
         PanelExpansionChangeEvent event =
                 new PanelExpansionChangeEvent(
                         /* fraction= */ mCurrentExpansion,
diff --git a/packages/SystemUI/src/com/android/systemui/statusbar/phone/StatusBarKeyguardViewManager.java b/packages/SystemUI/src/com/android/systemui/statusbar/phone/StatusBarKeyguardViewManager.java
index 052a4f7c5f7cf..c2194815b77ad 100644
--- a/packages/SystemUI/src/com/android/systemui/statusbar/phone/StatusBarKeyguardViewManager.java
+++ b/packages/SystemUI/src/com/android/systemui/statusbar/phone/StatusBarKeyguardViewManager.java
@@ -164,6 +164,10 @@ public class StatusBarKeyguardViewManager implements RemoteInputController.Callb
 
         @Override
         public void onVisibilityChanged(boolean isVisible) {
+            mCentralSurfaces
+                    .setBouncerShowingOverDream(
+                            isVisible && mDreamOverlayStateController.isOverlayActive());
+
             if (!isVisible) {
                 mCentralSurfaces.setBouncerHiddenFraction(KeyguardBouncer.EXPANSION_HIDDEN);
             }
diff --git a/packages/SystemUI/tests/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandlerTest.java b/packages/SystemUI/tests/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandlerTest.java
index 442e41c9b8d3d..c3fca29a9883b 100644
--- a/packages/SystemUI/tests/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandlerTest.java
+++ b/packages/SystemUI/tests/src/com/android/systemui/dreams/touch/BouncerSwipeTouchHandlerTest.java
@@ -428,7 +428,6 @@ public class BouncerSwipeTouchHandlerTest extends SysuiTestCase {
     @Test
     public void testInformBouncerShowingOnExpand() {
         swipeToPosition(1f, Direction.UP, 0);
-        verify(mCentralSurfaces).setBouncerShowingOverDream(true);
     }
 
     /**
@@ -441,7 +440,6 @@ public class BouncerSwipeTouchHandlerTest extends SysuiTestCase {
         Mockito.clearInvocations(mCentralSurfaces);
 
         swipeToPosition(0f, Direction.DOWN, 0);
-        verify(mCentralSurfaces).setBouncerShowingOverDream(false);
     }
 
 
diff --git a/packages/SystemUI/tests/src/com/android/systemui/statusbar/phone/StatusBarKeyguardViewManagerTest.java b/packages/SystemUI/tests/src/com/android/systemui/statusbar/phone/StatusBarKeyguardViewManagerTest.java
index a94ad0b763aa1..a265a63794ec1 100644
--- a/packages/SystemUI/tests/src/com/android/systemui/statusbar/phone/StatusBarKeyguardViewManagerTest.java
+++ b/packages/SystemUI/tests/src/com/android/systemui/statusbar/phone/StatusBarKeyguardViewManagerTest.java
@@ -61,7 +61,9 @@ import com.google.common.truth.Truth;
 import org.junit.Before;
 import org.junit.Test;
 import org.junit.runner.RunWith;
+import org.mockito.ArgumentCaptor;
 import org.mockito.Mock;
+import org.mockito.Mockito;
 import org.mockito.MockitoAnnotations;
 
 import java.util.Optional;
@@ -97,6 +99,7 @@ public class StatusBarKeyguardViewManagerTest extends SysuiTestCase {
     @Mock private LatencyTracker mLatencyTracker;
 
     private StatusBarKeyguardViewManager mStatusBarKeyguardViewManager;
+    private KeyguardBouncer.BouncerExpansionCallback mBouncerExpansionCallback;
 
     @Before
     public void setUp() {
@@ -136,6 +139,11 @@ public class StatusBarKeyguardViewManagerTest extends SysuiTestCase {
                 mBypassController);
         when(mKeyguardStateController.isOccluded()).thenReturn(false);
         mStatusBarKeyguardViewManager.show(null);
+        ArgumentCaptor<KeyguardBouncer.BouncerExpansionCallback> callbackArgumentCaptor =
+                ArgumentCaptor.forClass(KeyguardBouncer.BouncerExpansionCallback.class);
+        verify(mKeyguardBouncerFactory).create(any(ViewGroup.class),
+                callbackArgumentCaptor.capture());
+        mBouncerExpansionCallback = callbackArgumentCaptor.getValue();
     }
 
     @Test
@@ -417,4 +425,24 @@ public class StatusBarKeyguardViewManagerTest extends SysuiTestCase {
         return new PanelExpansionChangeEvent(
                 fraction, expanded, tracking, /* dragDownPxAmount= */ 0f);
     }
+
+    @Test
+    public void testReportBouncerOnDreamWhenVisible() {
+        mBouncerExpansionCallback.onVisibilityChanged(true);
+        verify(mCentralSurfaces).setBouncerShowingOverDream(false);
+        Mockito.clearInvocations(mCentralSurfaces);
+        when(mDreamOverlayStateController.isOverlayActive()).thenReturn(true);
+        mBouncerExpansionCallback.onVisibilityChanged(true);
+        verify(mCentralSurfaces).setBouncerShowingOverDream(true);
+    }
+
+    @Test
+    public void testReportBouncerOnDreamWhenNotVisible() {
+        mBouncerExpansionCallback.onVisibilityChanged(false);
+        verify(mCentralSurfaces).setBouncerShowingOverDream(false);
+        Mockito.clearInvocations(mCentralSurfaces);
+        when(mDreamOverlayStateController.isOverlayActive()).thenReturn(true);
+        mBouncerExpansionCallback.onVisibilityChanged(false);
+        verify(mCentralSurfaces).setBouncerShowingOverDream(false);
+    }
 }