diff --git a/changelog/fix_false_negative_when_nested_classes_has_private_or_protected_methods.md b/changelog/fix_false_negative_when_nested_classes_has_private_or_protected_methods.md
new file mode 100644
index 0000000000..86e5d5ed8a
--- /dev/null
+++ b/changelog/fix_false_negative_when_nested_classes_has_private_or_protected_methods.md
@@ -0,0 +1 @@
+* [#712](https://github.com/rubocop/rubocop-rails/issues/712): Fix false negative in `Rails/Delegate` when preceding nested class declares private or protected methods. ([@Darhazer][])
diff --git a/lib/rubocop/cop/rails/delegate.rb b/lib/rubocop/cop/rails/delegate.rb
index df86aeb5d3..7bc8f27c08 100644
--- a/lib/rubocop/cop/rails/delegate.rb
+++ b/lib/rubocop/cop/rails/delegate.rb
@@ -54,6 +54,7 @@ module Rails
       #   delegate :bar, to: :foo, prefix: true
       class Delegate < Base
         extend AutoCorrector
+        include VisibilityHelp
 
         MSG = 'Use `delegate` to define delegations.'
 
@@ -112,17 +113,11 @@ def prefixed_method_name(body)
         end
 
         def private_or_protected_delegation(node)
-          line = node.first_line
-          private_or_protected_before(line) ||
-            private_or_protected_inline(line)
+          private_or_protected_inline(node) || node_visibility(node) != :public
         end
 
-        def private_or_protected_before(line)
-          (processed_source[0..line].map(&:strip) & %w[private protected]).any?
-        end
-
-        def private_or_protected_inline(line)
-          processed_source[line - 1].strip.match?(/\A(private )|(protected )/)
+        def private_or_protected_inline(node)
+          processed_source[node.first_line - 1].strip.match?(/\A(private )|(protected )/)
         end
       end
     end
diff --git a/spec/rubocop/cop/rails/delegate_spec.rb b/spec/rubocop/cop/rails/delegate_spec.rb
index 268804b6d0..5d7728aade 100644
--- a/spec/rubocop/cop/rails/delegate_spec.rb
+++ b/spec/rubocop/cop/rails/delegate_spec.rb
@@ -125,7 +125,7 @@ def fox
         bar.fox
       end
 
-        private
+      private
 
       def fox
         bar.fox
@@ -147,6 +147,41 @@ def fox
     RUBY
   end
 
+  it 'works with private methods declared in inner classes' do
+    expect_offense(<<~RUBY)
+      class A
+        class B
+
+          private
+
+          def foo
+            bar.foo
+          end
+        end
+
+        def baz
+        ^^^ Use `delegate` to define delegations.
+          foo.baz
+        end
+      end
+    RUBY
+
+    expect_correction(<<~RUBY)
+      class A
+        class B
+
+          private
+
+          def foo
+            bar.foo
+          end
+        end
+
+        delegate :baz, to: :foo
+      end
+    RUBY
+  end
+
   it 'ignores delegation with assignment' do
     expect_no_offenses(<<~RUBY)
       def new