JPanel Rectangle Drawing Relative To The Full Window

I'm currently making a Breakout clone to learn about different ways of organizing my code and whatnot but I've run into a problem with the positioning of some pieces versus the position of the mouse.

I've created a blue rectangle on the screen that turns white when the mouse hovers over it, BUT it actually only ends up turning white about halfway down and then continues on off the block. I moved the rectangle to 0,0 to see where it draws and it looks like it is drawing to the very top left corner of the window itself but for the mouse coordinates, the top left is just where the black area is and excludes the borders of the window.

Here is the class rendering the rectangle, it extends from a class that in turn extends from the JPanel class:

public class MainMenuState extends MenuState {
JFrame gameFrame;
Graphics2D g;
// PlayButton variables
int playPosX = 0;
int playPosY = 0;
int playWidth = 100;
int playHeight = 50;

[Code] ....

A few other things I tried that I can think off the top of my head: Play around with different layouts (at times this caused the screen to shrink to a small size as well as using pack()), using setSize() setLocation() or setBorder() in the MainMenuState class which had no effect.

Someone on another forum also suggested trying to utilize component.getLocationOnScreen(): I tried two things with the getXOnScreen method, first subtracting with the location of the JPanel which of course gave me the same problem. After that I tried

MOUSE.x = event.getXOnScreen() - gameFrame.getLocationOnScreen().x;
MOUSE.y = event.getYOnScreen() - gameFrame.getLocationOnScreen().y;

but that resulted in some errors (null pointers) and the mouse was just printing out a position of 0,0